Biopharmaceuticals, Financialization & Nationalism in the Age of COVID-19

Touting it as Canada’s contribution to the global fight against SARS-CoV-2, last November the federal government bought US$32.5 million worth of bamlanivimab, a COVID-19 therapeutic. With only weak evidence of effectiveness, the therapeutic has been a “flop” thus far, raising the question of whether securing access to an effective treatment against COVID-19 was really the objective driving its development.

A deeper look into the deals and decisions suggests otherwise, illustrating the financialized state of drug development as well as the systemic failure of the nation-state, through publicly funded institutions, to counter that reality even at the height of COVID-19.

The bamlanivimab backstory

Bamlanivimab is a monoclonal antibody first identified and developed by the Vancouver-based company AbCellera Biologics. Employing 174 people today, AbCellera was founded in 2012 by two researchers at the University of British Columbia, Carl Hansen and Véronique Lecault. Its business model is based upon technology Hansen and Lecault co-invented while at UBC. After the company was spun off, the university granted AbCellera a “worldwide, exclusive license” to the intellectual property associated with the microfluidic device it uses to screen hundreds of thousands of antibodies simultaneously to identify those most likely to guard against infection.

On the strength of its platform technology, AbCellera has signed more than 70 deals, including a collaboration agreement with U.S.-based pharmaceutical giant Eli Lilly that led to the identification of bamlanivimab. Within two months of signing the deal with AbCellera, Lilly had initiated a phase 1 clinical trial with 24 hospitalized COVID-19 patients. In November, on the strength of interim results from a phase 2 trial called BLAZE-1 involving 467 patients with mild to moderate symptoms, bamlanivimab was granted “emergency use authorization” by the U.S. Food and Drug Administration and then authorized by Health Canada under its COVID-19 Interim Order.

However, independent reviews conducted by the Canadian Agency for Drugs and Technology in Health (CADTH) have cast significant doubt on bamlanivimab’s supporting evidence, which has been mirrored by provincial and prescriber decisions not to utilize the therapy. In its critical appraisal of the pivotal BLAZE-1 trial, CADTH concluded that the results were “unclear” for a variety of reasons, including that “viral load did not appear to be a clinically meaningful outcome because the viral load was greatly reduced in both the treatment and placebo groups by day 11.” Recognizing the need to expedite access to therapies, CADTH prepared a second review, incorporating not only BLAZE-1 but also expert clinical input; it similarly concluded that the existing evidence was “insufficient to conclude that IV administration of bamlanivimab should be standard of care, will lead to faster recovery, or will reduce the risk of hospitalization or time in hospital.”

While the evidence continues to evolve, the agreements struck during the drug’s development have delivered immediate returns to AbCellera. Upon signing its deal with Lilly in March 2020, AbCellera received US$25 million and the right to royalties of up to US$125 million per product, per country. With bamlanivimab authorized in two countries, and agreements between Lilly and the U.S. (US$375 million) and Canadian (US$32.5 million) governments in place, royalties should start to flow AbCellera’s way. But the real windfall for AbCellera came when the company went public in December, netting US$555.5 million – the single largest initial public offering (IPO) in Canadian biotech history.

Papering over the public’s investment

Absent from much the coverage of AbCellera’s success is any discussion of what return the public should receive for its significant investment in AbCellera prior to, and during, the pandemic.

AbCellera sprang out of UBC’s Michael Smith Laboratories, which has received countless grants from the Canadian Institutes of Health Research and other public sources over the years. Spinning off the company legally distances the new entity from its publicly funded origins while its executives and employees continue to hold university appointments and affiliations. The licensing agreement between UBC and AbCellera is meant to meet the university’s ambition of “mobiliz(ing) its technology for the public benefit, and in a manner consistent with its Global Access Principles.” But the actual terms of the deal are silent with respect to access in the Global South and the affordability more generally of any health products, such as bamlanivimab, that AbCellera helps to develop.

This is how “financialization” works in the field of biopharmaceuticals. Traversing the divide between drug discovery and delivery to patients requires significant resources, a great deal of which trace back to the public sector. A variety of actors involved in that research and development process fail to embed commitments to access into the research agreements that structure the knowledge translation process. Transaction after transaction, the public’s investment is papered over while the corporate actors involved maximize revenues for shareholders. Financial goals supplant therapeutic access, if not in principle, then in practice.

The federal government seemingly attempted to protect the public’s investment when it invested an additional CA$175.6 million in AbCellera through its Strategic Innovation Fund (SIF) last April. The funding terms require that AbCellera:

1) ensure that any therapies or diagnostic tests “developed directly as a result of the Project will be accessible and available for the Canadian population”;

2) establish “clinical trial site(s) in Canada for its antibody discoveries related to” COVID-19;

3) “maintain ownership of Project Intellectual Property to which the Minister of Innovation, Science, and Economic Development (ISED) has directly contributed”;

4) “develop an internal IP strategy … setting out the terms that support the creation and retention of (intellectual property) in Canada”;

5) “assign, transfer or license the Project Intellectual Property, to which the Minister has directly contributed … to ensure a domestically-sourced supply of (medical countermeasures) in response to” COVID-19;

6) and “maintain ownership and ongoing operations of its (antibody manufacturing facility) in Canada for the Term (of the agreement).”

The problem is that one month prior to signing the SIF, AbCellera had already agreed to assign “in its entirety, all its rights, title and interest in the (results of its research), including any and all Intellectual Property Rights” to Lilly provided they do not relate to AbCellera’s antibody screening platform itself. No term in the agreement between AbCellera and Lilly speaks to the accessibility of bamlanivimab, or any other products that result from the collaboration, to Canadians.

Nationalizing without nationalism

That AbCellera’s agreement with Lilly had been publicly announced before the SIF money was allocated calls into question the goal of the government’s funding. The government, and in particular ISED, given its business-oriented mandate, may find value in helping fund the success of a homegrown company and Vancouver’s perception as a globally competitive hub for biotech innovation. Clearly, enhancing Canada’s domestic research and manufacturing infrastructure has taken on added precedence through the pandemic. The SIF agreement with AbCellera seeks to encourage the conduct of clinical trials in Canada, although no trials involving bamlanivimab have been initiated here to date.

Unless the underlying approach to biomedical innovation that prioritizes revenue generation over other goals is disrupted, however, access to and the affordability and equitable distribution of the resulting products remains at risk. Nationalizing biopharmaceutical production, i.e., ensuring that the public’s investment remains visible, intact and accepted throughout the R&D process can help reshape innovation toward the pursuit of public good.

First, a necessary starting point is making the agreements that bridge the public and private sectors open to scrutiny. Usually they are kept strictly confidential; on the strength of that secrecy, it has become received wisdom that considerations of accessibility, affordability and equity have no place within the four corners of these agreements. But notable exceptions exist, and the terms of the SIF deal could provide a model to build upon beyond COVID-19.

Second, when public funding has contributed to the development of a drug, vaccine, or other technology, such as AbCellera’s microfluidic device, that contribution should be reflected across all agreements and/or entities involved in the commercialization process. Public interest obligations should serve as a through-line of commercialization, part and parcel of all government funding, university tech transfer practices and start-up company charters. There is no hard evidence that integrating such commitments into public funding and technology transfer will chill commercialization activity. If such commitments prove a disincentive to industry (the uptake of SIF funding by several private sector firms suggests otherwise), then new approaches to biopharmaceutical innovation, such as open science drug discovery, and publicly controlled drug manufacturing facilities, should be scaled up.

Third, key decision-makers in government, research funding bodies and academic institutions must accept and uphold public interest norms as integral to biopharmaceutical innovation. For that to occur, the federal government and others must rely far less on those who benefit from the status quo for guidance. New approaches to innovation, contractual commitments to access and affordability will not be given due consideration, much less incorporated into research agreements, when the spaces in which the key decisions are made, such as Canada’s COVID-19 Therapeutics Task Force, are dominated by deal-makers and venture capital leaders.

In the end, AbCellera’s approach to biopharmaceutical discovery appears promising and efficient. Bamlanivimab may yet prove an important treatment, and the company’s technology is likely to yield other important therapeutic candidates to guard against a variety of pathogens. How accessible such therapies will be is less certain since the federal government and a variety of publicly funded institutions have relinquished control over knowledge production to market imperatives.

Competing interests: Mr. Herder is a member of the Patented Medicine Prices Review Board, Canada’s national drug price regulator, and receives honoraria for his public service.

The comments section is closed.


Matthew Herder


Matthew Herder, JSM, LLM, is the director of the Health Law Institute, Schulich School of Law, Dalhousie University. He is also an associate professor in the Department of Pharmacology, Faculty of Medicine, Dalhousie University.

Republish this article

Republish this article on your website under the creative commons licence.

Learn more