If it's possible to blend a legacy and an upstart into one person, Roberto Bellini may very well fit the bill.
Roberto is the son of globally honored researcher and industry leader Dr. Francesco Bellini, who serves as chairman of Bellus as well as Picchio International and Prognomix. The senior Bellini is most known for his leadership of BioChem Pharma, which merged with Shire in 2001.
But his son — along with other leaders in orbit around the Bellus solar system in Laval, outside Montréal — is putting his own imprint on the region's life sciences brand as the president and CEO of Bellus Health. Bellus is developing drugs for rare diseases with an initial focus on kidney disorders.
We caught up with Roberto at the C2MTL conference, one of a new generation of globally aware business/high-tech/arts events that combines high-level speakers with high-impact entertainment and aesthetic value.
The C2MTL conference itself: "Biotech in itself tends to be quite insulated in its thinking, so it's nice to get out and find out what other business models people are using. There are so many interesting ways of building up and running companies, and the focuses people put on their companies are different in the IT world — you see a lot of companies focusing on culture, and biotech companies often tend to focus on products. I personally think we need to implement that [focus on culture] more."
How Bellus differs from typical venture capital: "Our strategy is focused on a smaller number of investments, and a larger involvement in the companies. Traditional VC might do 10 to 20, and we want to do two to five investments, take larger ownership positions, and get involved at least strategically at the board level, and that evolved to becoming operationally involved. We're also very patient capital: VCs have a 10-year fund period … we have more flexibility than that."
Why Montréal?: "We've always had a base here, and that generates a lot of advantages — there's a lot of deal flow here, people know us, and they come see us in biotech. That counts for a lot, versus if a project comes in from the US, I know that project has gone to see 40 to 50 VCs already. There has been a large number of due diligences, and people have said no to the project.
"Second, we have a very good understanding of the local community, and where the talent is. It is a system that's set up to help foster the growth of biotech companies. We also have great sciences here. We know how to navigate the environment. There are excellent ideas from a lot of the universities here, and characteristics to invest and move forward. My father spends a lot of time in Italy as well. There was an idea in Italy, and we repatriated it here five years ago — Klox Technologies. The family office owns about 70 percent of the company. The reason for repatriation was we had better access to capital, and to human resources. There is great expertise here to develop the project."
Incentives in Quebec: "Anywhere from 30 to 50 cents on the dollar invested in R&D is given back to you in the form of cash. It's not over 10 years, and you can use that cash to reinvest. What's particularly important is it's not a grant-based system. It's given unequivocally to everybody —whether it's a great idea or terrible idea, you get it. I firmly believe private capital knows what's best to invest in.
There is an ongoing debate at the federal level, thinking of moving some of the tax credits to more of a grant-based system. Look at amazing breakthroughs in any sector — all start out by being told 'That's crazy.' None of those ideas would have made the grade in a grant-based system that has to get through a review committee."
Challenges in Quebec: "The biggest 'con' to the environment we have here is the access to capital and investors is much bigger in the US than in Canada. We've been fortunate because we have our own capital to invest. That gives us a leg up."
Facilities in Laval: "The building where we're located houses a number of different companies. It was built in the 1990s as the state of the art for biopharma, for the company my father was CEO of. When Shire decided to close down their operations in Canada, we decided to reinvest in that building. It's now become a mini-hub of biotech in Canada. Vertex is there because we sold a lot of our companies to Vertex. They have 80 employees, we have 10, and Klox has 30.
Talent: "It's not a difficulty getting talent at the early stage of someone's career. The problem is when people become highly specialized. Once again, as with accessing capital, we're working on a global basis. A lot of people end up staying in Montréal, but firms attract people to the US, to Boston and California. And to be honest, we compete with the other life sciences areas in Canada, including Toronto and Vancouver. Generally speaking, we have a strong base — if you started a biotech company in Las Vegas, you don't have that. At the later stage, we have that competition."
Universities and Intellectual Property: "We have A-class universities here. The question is how effective tech transfer offices are. They're not very effective. However, if I compare them to Harvard, MIT, and top-class universities in Europe, it's on par. People complain about tech transfer offices, but they complain about them everywhere. A couple are more successful and have models that work better, but overall it's a situation comparable to other places in the world.
"The star product in BioChem Pharma was discovered at McGill University. McGill gave all the rights to BioChem, and there wasn't any royalty, so McGill missed out on a very large potential royalty. We made up for a lot of that, because we felt we had to give back, but at the same time, when you look at the universities, they feel over the last 20 years they've given up more than they should have.
"Generally speaking we have good relationships with the school, and we find the right kinds of ways to move projects we have mutual interest in. I'm a really big fan of standard-form agreements within universities. Sometimes they take way too long. Go with a 2- to 3-percent royalty, for every single IP, and make it all the same. Make it easy for the company to come in and license IP. Keep innovation rolling and get it out into the world. To bog them down in these kinds of negotiations wastes time and effort."
Biopharma's changing business model: "AstraZeneca had a lot of lab space versus office space — ask them how they dealt with that. That ratio has changed, and people do a lot more outsourcing of the science to CROs. Fifteen to 20 years ago, big pharma was 20 percent external [R&D], 80 percent in-house, and you'll probably see a complete flip in another 10 years. Today it's 50-50."