Cantech Letter interviews Ken Boutilier of Innovotech

We’re always reminded that health care costs are spiraling, we’re less often reminded of exactly why. One number might surprise: the Center for Disease Control estimates that the financial burden attributable to healthcare associated infections is between $28 and $33 billion. The trouble? Antibiotics. Patients with infections take a series of antibiotics, but the infections develop resistance over time. Biofilm, or microbial infections are much worse. Edmonton based Innovotech‘s new test developed allows doctors to more accurately identify the right antibiotics required to treat serious, chronic infections that are biofilm based. The test has shown positive results for treatment for serious lung infections in patients with Cystic Fibrosis (CF), a population recognized as having among the most life threatening lung infections. Nick Waddell talks to Ken Boutilier of Innovotech:

Ken, can you give us a brief overview of how Innovotech came to be? Where did the idea for the company originate?

Gerry Tertzakian, Innovotech’s first CEO and I met for lunch one day as I was looking for a new career challenge, and was hoping that he would be able to provide me with some suggestions as to networking opportunities within Alberta’s biotech sector. Instead, he asked me if I would be interested in joining a start up ….as the CEO. It was at that point that we started looking for a technology, and by either chance or serendipity, a Board member of the newly formed company sat next to Dr. Merle Olson on a flight. Merle had a company that was a spinoff from the University of Calgary that was looking for management and money. This is how we entered the biofilm space. One of our criteria was for a company or a technology that was close to, or, at revenue. This approach has served us well, specifically during the economic meltdown of the past 2 years.

Innovotech is currently in clinical trials for bioFilm PA™ test. Can you tell us what this is and what ramifications it may have for the treatment of Cystic fibrosis?

bioFILM PA™ is the world’s first biofilm susceptibility test. Susceptibility tests simply test whether a bacteria is susceptible or resistant to a panel of different individual antibiotics. This helps doctors in choosing an antibiotic for treatment. The problem is that current tests do not test the biofilm state of the bacteria which can be up to 1000 times more resistant than the free-floating organism. As already mentioned, it is estimated that over 80% of all infections are caused by organisms in a biofilm state, meaning that in 80% of cases laboratories are using the wrong test resulting in treatment failures in chronic and medical device-related infections. Over 35 million susceptibility tests are used annually. Lung infections in patients with cystic fibrosis are just one of many chronic infectious diseases caused by biofilms.

What is the nature of your partnership with Teleflex (NYSE:TFX)

We provide Contract Research Services to Teleflex. These services are available on a fee-for-service basis to anyone with a biofilm problem. Approximately 50% of our revenue comes from medical device companies like Teleflex because biofilms easily grow on catheters, stents, etc. We design and conduct research studies to support claims made for specialized antimicrobial coatings on devices being submitted to regulatory agencies. The balance of this business is with a wide variety of companies including cosmetics, paint, oil/gas, food processing, disinfectant and agriculture.
This revenue model is somewhat unique in biotech but has provided substantial benefits to Innovotech over its existence by reducing overhead costs and burn rate. Arguably the greatest benefit is that it has provided the company with an awareness of biofilm problems in the world, knowledge that the company uses to assess new product opportunities.

Innovotech was recently awarded $900,000 from Agriculture and Agri-Food Canada to facilitate the commercialization of Agress your environmentally friendly seed treatment and plant spray designed to protect crops against both bacterial and fungal infections.How big do you think the immediately addressable market for this product is?

The immediate addressable market will be seed treatment worldwide worth an estimated value of $1.5 billion. Innovotech has a partnership agreement with Syngenta, the world’s largest seed treatment company, with revenues of over $10 billion. Expansion into the foliar spray market (with an estimated value of $20 billion) and into other products will evolve in the future.

What is the revenue mix, percentage wise between the different segments of your business?

Over 90% of our revenue is from our contract research business. The balance is from sale of our MBEC Assay, a basic research tool for biofilm research. There were a small number of sales in 2010 for bioFILM PA as it just entered the market. In summary, Innovotech provides a unique opportunity for investors for a number of reasons, including an innovative technology with multiple applications that can be utilised in a variety of industries. Additionally, we have a strong product pipeline supported by engaged channel partners who understand the significance of the issues caused by biofilms, and the need for solutions to deal with these issues. Last but not least, we have a healthy revenue stream. In short, we believe that microbiology will need to be reinvented to meet the needs of biofilm microbiology – this is Innovotech’s opportunity.