POLITICS

Merck and Lumira Capital to announce a multimillion-dollar Quebec research fund

03/22/2012 03:41 EDT | Updated 05/22/2012 05:12 EDT
MONTREAL - Merck Canada is partnering with Lumira Capital and other venture capital firms to launch a multimillion-dollar research and development fund to attract pharmaceutical firms to Quebec.

The Montreal-based subsidiary of the U.S. pharmaceutical giant is set to announce an investment Monday to create the Merck-Lumira BioScience Fund.

The fund will initially be worth several tens of millions of dollars, The Canadian Press has learned.

Merck has committed to investment $100 million through 2015 in biopharmaceutical research and development collaborations with Quebec-based companies and academic institutions.

It announced in mid-2010 the elimination of 200 jobs with the closure of its Montreal lab, which was once the largest research facility in Canada.

The company has developed several drugs over the years in Canada and markets 530 pharmaceutical, consumer and animal health products. It has focused on expanding its offerings in virology, oncology and diabetes.

Quebec Economic Development Minister Sam Hamad is expected to participate in the announcement Monday, but the provincial government isn't immediately providing funding, sources say.

Lumira Capital invests in market-leading health and life sciences companies to maximize profitable returns.

"We roll up our sleeves and work side by side with our entrepreneurs, their management teams and our syndication partners...to help the businesses achieve their full potential," the company said on its website.

Also attending the event is Jacques Bernier, managing partner of Teralys Capital, who has publicly urged companies to support Quebec's entrepreneurs and technology.

Teralys Capital's funds are focused on technology companies in the life sciences, information technology and cleantech sectors.

Montreal's drug research sector has been under threat as global giants adjust to the loss of patent protection for blockbuster drugs and challenges in developing replacements.

Several companies have recently announced plant closures, including AstraZeneca. The British drug maker announced in February the closing of its Quebec research and development facility, eliminating 132 jobs.

French pharmaceutical company Sanofi-Aventis laid off 100 workers at its R&D centre in Laval. Johnson & Johnson also announced the closure of its research centre and the layoff of 126 workers.

Hamad has been given a mandate by the Liberal government to develop a plan to address the shift from internal research to pharma partnerships with academia and small companies.

Industry observers say a shift to personalized medicine based on genetics will require governments to target investments to university medical labs and small startup biotech firms with 10 to 20 workers.