COVID-19 vaccine maker Providence says it's leaving Canada after calls for more federal support go unanswered

The head of a homegrown company behind a promising COVID-19 vaccine says he's ready to pull his company out of Canada and take its product elsewhere after calls for more substantial federal support went unanswered.

Brad Sorenson, the CEO of Calgary-based Providence Therapeutics, told CBC News he's had enough of the "runaround" from federal and provincial governments and he's working with the company's board of directors to move its operations overseas to focus on developing a vaccine for people in the southern hemisphere.

"I'm moving on, that's where I'm at now. I've prostrated myself at the altar of government in Canada for a year and I've received nothing for it. I'm tired of begging and pleading," Sorenson said.

"I can't tell you how much this pains me. The reality is, I can do more good for the world outside of Canada than I can in."

Sorenson said the company will be "redomiciled" but he hasn't settled on a country yet.

The decision could put a planned vaccine manufacturing facility in Calgary in jeopardy. The facility was to be built by Providence's partner, Northern mRNA, and Providence was slated to be the anchor tenant.

"It's not going to be made here in Canada. It's not going to be prioritized for Canadians," Sorenson said, adding the provincial government in Alberta has also "dragged its heels" on making a firm commitment to help commercialize his vaccine.

The move is a setback for the federal government's efforts to nurture a domestic biotechnology industry. The COVID-19 crisis has exposed how being entirely dependent on foreign sources for much-needed products like vaccines makes Canada vulnerable.

'I never asked for a single handout'

Providence, which was developing mRNA cancer vaccines before the COVID-19 crisis hit, came forward with promising data about its novel coronavirus product last March, only weeks after BioNTech and Moderna produced similarly encouraging early results for their mRNA-based vaccines.

Sorenson claimed the company's pre-clinical trial results were "equivalent or better than these big companies that are now saving the world."

CBC News has no way to verify this claim.

Last year, the small Canadian firm — which developed its product with researchers at the Sunnybrook Research Institute in Toronto — asked the federal government for a loan to help launch clinical trials in humans and stand-up a manufacturing site in Canada. Those requests were largely ignored as the government assembled a vaccine task force to help it make funding decisions.

The task force was quietly launched in June, months after other countries spent billions of dollars to get a COVID-19 vaccine off the ground. The very existence of this group of experts wasn't made public until August.

Sorenson said that after a 45-minute meeting with the task force, its members said they were concerned that Providence might not be able to scale up production fast enough. He said he assured them cash from Ottawa would help solve that problem.

Moderna — itself a fledgling company with no track record of producing much of anything before 2020 — received more than $480 million in funding from former U.S. president Donald Trump's Operation Warp Speed in April of last year. Canadian officials never came through with a similarly firm commitment to help Providence, Sorenson said.

"I never asked for a single handout. All I've asked for is a deposit on vaccines or a non-interest loan," Sorenson said.

After Sorenson gave a series of media interviews last fall to draw attention to the funding gap, the National Research Council (NRC), a government-run agency, granted some $5 million to help launch the first phase of clinical trials, which subsequently started in January.

Providence and its partner, Northern mRNA, were also cleared to access up to $5 million to start the manufacturing process from the government's "next generation manufacturing supercluster" program.

But as a small, privately held firm with little access to large pools of capital, Providence needed much more money than that to produce its product at scale, Sorenson said.

Manitoba Premier Brian Pallister forged a deal with Providence Therapeutics worth about $36 million. Under the agreement, the province would pay about $18 per dose, with Manitoba making a 20 per cent ($7.2 million) non-refundable down payment and subsequent payments after the vaccine was approved and delivered.

"The point isn't what the price is when there's no vaccines here. The point is to create a situation where there can be vaccines here," said Pallister in February.

Sorensen, a Calgary-born businessman, has appeared this spring before a number of House of Commons committees to make the case for more federal investment in a company that could supply made-in-Canada mRNA products now and into the future.

mRNA products give the body's cells instructions to make proteins to prevent or treat diseases. Some scientists claim mRNA products — which have proven effective during the pandemic — will soon displace more conventional vaccine products. These products have the potential to prevent and treat other deadly diseases, such as cancer, malaria, influenza, HIV and Parkinson's disease, among others.

Sorenson wrote a letter to Prime Minister Justin Trudeau in February asking for a $150-million cash injection to help bring the shot to market. He said he never heard back.

In a statement, a spokesperson for Innovation Minister François-Philippe Champagne said federal funding decisions were based on recommendations from a group of outside experts on which companies had the best chance of developing a viable COVID-19 product.

"Our investment decisions have been informed by the expert advice of the Vaccine Task Force, as we have pursued the most promising opportunities to build resilience in Canada's future supply of vaccines and therapeutics," said John Power, the minister's spokesperson.

Providence had access to the $10 million in NRC and supercluster funds, Power said, and more funding could be forthcoming as the company progresses through the clinical trial testing phase.

Providence is among six vaccine candidates and seven therapeutic candidates (companies developing COVID-19 treatments) that could be eligible for a slice of $113 million in additional funding from the National Research Council of Canada Industrial Research Assistance Program (NRC IRAP).

"We continue to follow Providence's progress closely and are committed to working with the company to provide support on further milestones as results are demonstrated from their clinical trials," Power said.

Canada has committed over $1 billion to "strengthen Canada's biomanufacturing sector," Power said.

"This will ensure that Canada is well-positioned to develop and produce safe and effective vaccines and therapies for COVID‑19, and future pandemics, here at home."

Clinical trial data expected soon

Early data on the efficacy of Providence's product from phase one clinical trials will be "unblinded" and made public before May 10, Sorenson said.

That information is already in the hands of the federal government, he said, adding it's clear to him that Ottawa is only interested in working with what he calls "big pharma."

"I handed the government of Canada the football on the one yard line and all they had to do was punch it across and they took it and ran in the other direction," Sorenson said.

Sorenson said it's not just about money. To complete phase two of the clinical trials, the company has tried to get its hands on Pfizer vaccines to do a comparative analysis. The government has denied his request for some 500 vials to do this work.

Based on the advice of the vaccine task force, federal officials have made a $173 million commitment to help Quebec City-based Medicago produce its version of a COVID-19 vaccine.

Unlike the other COVID-19 vaccines that have been authorized for use, Medicago's vaccine uses virus-like particles which mimic the structure of the coronavirus.

Thanks in part to federal support, Medicago recently started the third and final stage of clinical trial testing, with the product set to be deployed in 30,000 human participants. The company said the results will be shared "later this year."

Sorenson said he believes the government picked winners and losers based on where a company was based, saying his Alberta roots may be to blame for the less-than-enthusiastic response from a government that doesn't hold a single seat in that province.

"People have said to me so many times and I refused to acknowledge it, but the truth is, if Providence was located in Quebec we wouldn't be having this conversation," Sorenson said.

"Canada's broken. The federal government doesn't see past Ontario heading west."

Pointing to a $40 million investment in Vancouver-based Precision Nanosystems, the Medicago support and a recently announced $483 million investment in pharmaceutical giant Sanofi to expand an existing Toronto vaccine plant, Sorenson said he thinks Canada's industrial policy is based on political motivations.

"It's pretty damn easy to figure out what their level of determination will be in regards to funding. It's about votes," he said.

While much of the federal funds are earmarked for companies in B.C., Ontario and Quebec, Providence and two other entities on the Prairies — Entos Pharmaceuticals in Edmonton and the University of Saskatchewan's Vaccine and Infectious Disease Organization (VIDO) — have also received federal support to pursue COVID-19-related vaccines or therapeutics.

Last summer, the vaccine task force — composed of doctors, researchers and former pharmaceutical executives from across the country, including Western Canada — recommended Canada sign deals with foreign companies like AstraZeneca, Pfizer, Moderna, Novavax, Johnson & Johnson, GlaxoSmithKline (GSK) and Sanofi, and the one Canadian company, Medicago.

Two of the 10 members of the vaccine task force worked as Sanofi executives, while another worked with GSK and Sanofi in a senior role. Canada has ordered up to 76 million doses from GSK-Sanofi, but that product was indefinitely delayed last year after it failed to produce sufficient results in clinical trials.

One member of the task force, Gary Kobinger — who helped develop a successful Ebola vaccine with a team in Winnipeg — resigned last fall amid concerns about the task force's transparency and its ties to the pharmaceutical industry.