Toronto
Life sciences summary
An evolving life sciences landscape
Toronto is the epicentre of the ‘Ontario Life Sciences Corridor,’ which is anchored by the downtown MaRS Discovery District, ‘Pill Hill’ in Mississauga and the McMaster Innovation Park (MIP) in Hamilton. The corridor also extends westward to include the University of Waterloo and its associated life-science and technology cluster. As each city defines and reports on its life sciences sector using different metrics, the most straightforward way to profile the sector is to look at each area separately.
According to a report by Deloitte for the non-profit group Life Science Ontario, the province’s life sciences sector generated nearly $49 billion in revenue in 2017. Province-wide, the sector employs more than 90,000 people and registered 19.3% growth in employment from 2006 to 2017, nearly double the Ontario overall average of 10.5%.
Toronto quick stats
90,000
Ontario’s life sciences sector employs more than 90,000 people and registered 19.3% growth in employment from 2006 to 2017
$1B
Toronto’s Discovery District invests more than $1 billion annually into public and private medical research
35
VC funding deals for life sciences firms in Ontario during 2020
Source: CVCA
2MSF
Hamilton’s McMaster Innovation Park is adding more than 2 million square feet of new life sciences space on its campus to meet demand
640 million doses/year
Capacity for mRNA vaccine production at Resilience Biotechnologies’ expanded Mississauga facility, to be completed in 2024
Hubs within the Corridor
The City of Toronto’s life sciences sector is one of the largest in North America, employing nearly 30,000 professionals and contributing more than $2 billion to the local economy. Toronto’s Discovery District health innovation hub is comprised of 7 million square feet of facilities representing Canada’s largest concentration of hospitals, research institutes, business incubators, and venture capital organizations, along with the University of Toronto. Within a 15-minute walk, 10 different clinical trial sites can be reached. The Discovery District invests more than $1 billion annually into public and private medical research. The following chart illustrates the city’s breakdown of jobs in the sub-sectors that make up life sciences:
Ryerson University’s Daphne Cockwell Health Sciences Complex
Credit: Ryerson University
Source: City of Toronto
Situated in the Meadowvale area of Mississauga, ‘Pill Hill’ is a cluster of most of the city's biotechnology, biomedical and other life-science companies. With more than 470 companies employing approximately 25,000 people, Mississauga’s life sciences cluster has evolved from a pharmaceutical hub to a diverse cluster of pharma, biotech, medical devices and other supplier organizations.
Mississauga is a preferred location for larger and more established life sciences companies, ranking as the number one location among major Canadian cities for companies in the sector employing 100 to 499 workers. The following chart illustrates the City’s classification of its life sciences sub-sectors and the number of businesses in each:
Mississauga is home to leading life sciences sub-sectors spanning various areas within the industry.
Source: City of Mississauga
The McMaster Innovation Park (MIP), in collaboration with McMaster University, acts as a bridge between academia and industry. MIP supports researchers with commercial aspirations and enables students to develop their ideas in its incubator and accelerator programs, while also connecting industry with McMaster University and other academic institutions. MIP primarily works with companies in life sciences, advanced materials and manufacturing, and information & communication technology. The organization is in the process of adding more than 2 million square feet of new life sciences space on its campus to meet demand.
Canada’s leading tech ecosystem, Waterloo Region has a track record of innovation looking to the future and is home to thousands of locally grown and global companies. The region is home to many tech firms, including about 75 engaged in health and life sciences, and its start-up accelerator infrastructure encourages further growth. Currently, the University of Waterloo is converting a 90,000-square-foot warehouse into the ‘Innovation Arena’, to be completed in 2023, which will feature shared product development labs, manufacturing and collaborative office spaces, and will also serve as a health-innovation nexus with increased partnerships and community connections.
McMaster Innovation Park’s completely renovated state-of-the-art laboratory building – 44 FRID
Credit: McMaster Innovation Park, LNG Studio, Chandos Bird HRD (CBH) and other members of the Integrated Project Delivery team.
Venture capital, funding and investment
According to CVCA, 35 venture capital funding deals for life sciences firms took place in Ontario during 2020. Venture-capital-backed companies in the sector employ nearly 1,500 people in Toronto alone, and more than 100 in Kitchener/Waterloo.
With hubs like the MaRS Discovery District, a concentration of first-class hospitals, and many post-secondary institutions nearby, Toronto has a solid foundation to become a healthtech research hub. Healthtech has emerged as a leading sector for venture capital investment in the GTA as COVID-19 pushed governments and institutions to embrace health innovation. According to a report from Hockeystick, the GTA tech ecosystem had 186 investments totalling $1.2 billion during 2020. Healthtech led in overall investment with $186 million in funding, followed by biotech with $134 million in funding.
Some notable recent financing deals include:
- In February 2021, Toronto’s Antibe Therapeutics raised $35 million through a bought deal public offering
- Toronto-based digital mental health care provider MindBeacon Holdings raised $65 million through its December 2020 IPO
- Psychedelic-based products company Cybin, based in Toronto, raised $45 million and went public through a reverse takeover in October 2020
- Hamilton-based Fusion Pharmaceuticals raised $290 million in its June 2020 IPO on NASDAQ
- Cyclica, a company using AI for drug development, raised $23 million in capital in June 2020
- Cloud-based home care software developer AlayaCare, with offices in Montréal and Toronto, received $48 million in early-stage funding in January 2020
- Deep Genomics, based in the MaRS Discovery District, secured $40 million in later-stage funding in January 2020
In Mississauga, notable investments in the life sciences sector made during the past year include:
- Bora Pharmaceuticals opened its 183,000-sf North American flagship manufacturing, packaging and analytical services/lab facility.
- Resilience Biotechnologies is set to receive support from the federal government to cover nearly half the cost of a $400-million, 55,000-sf expansion project at the company’s facilities in Mississauga, targeting completion in 2024, which will create 500 permanent jobs as well as 50 co-op placements for students, and allow the company to produce up to 640 million doses of mRNA vaccines per year – further fuelling Canada’s bio-manufacturing sector.
- Roche Canada grew its pharmaceutical headquarters in Mississauga with a recent investment of $500 million to establish a global operation, creating 500 new jobs over the next five years.
- Novo Nordisk and University of Toronto – Mississauga formed a $40-million partnership to establish the Novo Nordisk Network for Healthy Populations at the University, which will focus on new ways to support healthier urban populations.
In March 2021, Hamilton’s biotech and health sciences accelerators received a $6-million funding boost from FedDev Ontario to support local innovation. The funding will be provided to two non-profits: Innovation Factory and the Synapse Life Science Consortium.
Together, these organizations are launching the Southern Ontario Pharmaceutical and Health Innovation Ecosystem (SOPHIE). This program will support collaborative projects for Ontario-based life sciences firms, giving them access to Hamilton’s unique life sciences capabilities and research expertise.
Key players in the sector
Large and notable life sciences firms with a presence in the various GTA markets include:
- Abbott
- Amgen
- Apotex
- AstraZeneca
- Baxter
- Bayer
- GlaxoSmithKline
- Janssen
- Johnson & Johnson
- LifeLabs
- Merck
- Novo Nordisk
- Pfizer
- Roche
- Sanofi
Impact on commercial real estate market
The need for large facilities meeting rigorous technical requirements has traditionally meant that big tenants in the life sciences sector gravitate toward suburban markets, where more development land has been available and rental rates are lower. More recently, the growth in technology start-ups has meant that a greater share of activity takes place downtown. In the office market, higher availability and vacancy rates prevail in the suburbs compared with downtown, but their year-over-year increases as a result of the pandemic have been less severe. For example, the Meadowvale office node (which corresponds to “Pill Hill”) posted 13.6% availability in the first quarter of 2021 – well below the suburban and GTA-wide rates of 16.9% and 14.2%, respectively. In addition to their substantial suburban presence, some firms have recently turned their focus to establishing a footprint in downtown Toronto. For example, AstraZeneca leased 6,200 sf in the Financial Core’s Scotia Plaza office tower, augmenting its much larger Canadian head office and production facility in Mississauga.
Life sciences deals make up a relatively small percentage of overall office and industrial leasing activity but have nevertheless accounted for nearly 6 msf in transactions during the past two decades. Ongoing growth in the GTA’s life sciences sector (especially among healthtech start-ups) in the wake of the COVID-19 pandemic (and in preparation for future pandemics) means that demand for office, industrial and lab space will only increase – the latter two types are in short supply across the market. The expense and complexity of constructing lab space is a deterrent for many developers and little speculative construction takes place. However, the higher rental rates that can be achieved for these facilities will likely encourage some developers to build, amortizing their construction costs over a longer period. With the pandemic and an aging population making life sciences, biotech and pharmaceuticals top of mind, developers are already looking to target this sector more directly as demand grows, with projects aimed at meeting the technical requirements of life sciences tenants. In the meantime, the scarcity of available third-party lab space for lease is forcing some would-be tenants to consider converting traditional office or warehouse space into lab space.
The University of Toronto’s Schwartz/Reisman Innovation Centre
Credit: Weiss/Manfredi
Recently, some notable projects have resulted from government, institutional and philanthropic investment, including:
- A new Sanofi S.A. facility to be built on the company’s 54-acre site in North York with assistance from the federal, Ontario and City of Toronto governments. The funding will help Sanofi build a new facility that will expand its influenza vaccine production capacity, while giving it the tools to fill-and-finish other vaccines on a mass scale. The project is expected to be completed in 2027.
- Ryerson University’s Daphne Cockwell Health Sciences Complex building, completed in 2019, is a 300,000-sf building designed to allow nursing students and other health care professionals to collaborate on projects and lab work. The first eight storeys in the complex bring together four Ryerson academic departments – nursing, midwifery, nutrition and occupational and public health. The eight-storey base also includes research facilities, administration offices and a digital fabrication lab. Above is an 18-storey residence for 330 students.
- Currently under construction at the north end of the city’s “Hospital Row” – and part of both the MaRS Discovery District and the University of Toronto – is the university’s Schwartz Reisman Innovation Centre, a two-tower complex totaling 750,000 sf of space that will be completed in two phases. The first phase will erect the 12-storey west tower, creating 250,000 sf that will focus on AI and innovation, and provide a new home for the Schwartz Reisman Institute for Technology and Society and the Vector Institute, as well as other leaders of innovation. The second phase will build the larger, 20-storey west tower, which will provide 500,000 sf of space for life-saving biomedical innovation. The project was initiated by a $100-million donation from philanthropists and business leaders Gerald Schwartz and Heather Reisman.
The current health crisis has served as a wake-up call to strengthen the life sciences and health care industries domestically, and the Toronto-centred Ontario Life Sciences Corridor has all the elements to facilitate growth in these sectors. Ongoing investment and the explosion of new start-ups in healthtech and AI bode well for the future.
