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Bridging the Gulf - Access to Capital Markets

As a result of the USSR’s withdrawal of personnel and economic support Cuban Gross Domestic Product declined a cumulative 41.5% in the four years 1990-1993 (as measured in 1990 International Geary-Khamis dollars) recovering 2.0% and 3.4% in the subsequent two years and, even by 2003, still ~7% below the 1989 GDP. Between 1930 and 1934, during the Great Depression in the United States, US GDP declined 30.1%, by the same measurement, recovering ~8% in 1934 and to its 1930 level by 1937.

The Cuban government seized on the economic importance of introducing its life-sciences’ discoveries to the high-income countries, the major-market countries, in the shortest possible timeframe in order to mitigate its disastrous economic situation – named the Período Especial, a black dog of a magnitude significantly greater than that faced by the United States at its economic nadir. Although a number of multinational companies had visited Cuba the science remained largely unknown because of the absence of any publications in the Western scientific press and none of those multinationals demonstrated an interest in any components of the portfolio at the time.

The single most elusive element in the preparation of medicaments and medical devices for commercialization is access to capital and Cuba’s resolve to not follow the examples of other socialist countries in establishing capital markets compounded the dilemma for the Cuban scientific community. YM BioSciences, alone, recognized that access to capital – not science, not manufacturing, not clinical skills, not its regulatory framework all of which were extant – would be the principal driver of success for the entirety of the  nation’s centers of excellence and that YM offered a unique resolution – a bridge to the world's capital markets which it demonstrably achieved. The other elusive element was recognition – and YM made possible, with its shared boards and management, that Cuban scientists had access to international meetings and conventions and introductions to the principal pharmaceutical companies. A further culturally-important consequence of the joint ventures was to familiarize YM's Cuban colleagues as well as members of government with business practices conventional in YM's geography – risk analysis and other tools as well as certain concepts as basic as present value, itself critical to planning analytics, as well as governance. In part this latter was achieved by the inclusion of Dr. Agustín Lage Dávila on the board of directors of the parent company, YM's introduction of numerous officials and of its new co-executives to the stock exchanges added further dimensions and permitted YM to seed the concept that, by virtue of all Cubans being paid by the State, every one of the ~11 million was directly a "shareholder" in each of the enterprises of State – a concept now widely used in Cuba’s senior circles.

Pierre Trudeau

Rt. Hon. Pierre Trudeau meets with El Comandante Fidel Castro in support of YM BioSciences, 1995

Cuban Biotechnology

YM BioSciences founder David Allan and Castro, 1995

Cuban Biosciences

YM BioSciences executives with Fidel Castro, 1995

Although YM had benefited from the direct intercession on its behalf of Canada’s former Prime Minister, the Rt. Hon. Pierre Trudeau, with Fidel Castro specifically in order to bridge the apprehended divide, adherence to the established cultural and political foundations of the State resulted in conflicting agendas. 

Cuba’s wish and need to approach the major pharmaceutical markets, with the attendant requirement for access to capital, necessarily led to tensions that did not lend themselves to easy resolution. Rolando Perez, the distinguished Head of Research at CIM points out that the Cuban biotechnology model is 'completely different' from the development of Western pharmaceutical products" and continues "' I want all cancer patients in Cuba to receive these drugs for free and we need all the money we can get to finance our free Cuban health service.”'’ In 2016 statements by one of Cuba’s most respected scientists, the eminent Director General of CIM, Agustín Lage Dávila, illustrate the conflicting currents with then, and still in the present, business relationships between the Cuban bio and political establishments and major-market businesses. “Private property,” the trans-lation states, “and competition represent the past, and although this past still necessarily exists within the present, it continues to be the past".  Additionally, he continues, “[we’re seeking] a new type of science-manufacturing organization being different from the state-planned scheme; but also from the classic enterprise principles” ...“[the capitalists] believe that the market efficiently distributes investment in response to the demand; we believe that the market does not respond to an actual demand.……”

Frictions  from cultural  differences in those early days were partially overcome by YM’s respect for the dedication and the resilience  of the scientific community and by the effort that many members of the government put into dealing with this unique relationship. YM succeeded over time both in accessing the private and public capital markets (Canada, the UK, continental Europe and, uniquely, the US) and also in creating international partnerships for the lead product, Nimotuzumab, for its development in numerous important geographies including Japan and Singapore where Daiichi Sankyo and Innogene Kalbiotech Ltd (IGK), the biotech subsidiary of P.T Kalbe Farma Tbk, the largest public pharmaceutical company in Southeast Asia, became sublicensees. Licenses were also concluded in Europe (OncoScience AG) and South Korea (Kuhnil Pharmaceutical Co., Ltd.) with YM retaining North America, the world’s largest pharmaceutical market.

In the 23 years since YM founded its first joint ventures, not a single multinational pharmaceutical company has advanced the development of a Cuban-origin pharmaceutical other than YM’s sub-licensees. That geographical sub-licensing process, designed to maximize development progress, was at the time and remains today, unusual; but resulted in an impressive number of clinical trials, in diverse indications, that no small biotech company could have concluded on its own. Daiichi, in Japan, advanced in gastric and head-and-neck cancers; the Asian sublicensees, similarly, and, in Europe, YM’s sub-licensee initiated trials in inoperable pediatric glioma, hepatic, and pancreatic cancers.

A useful summary of the above, including an exceptionally-detailed review of Nimotuzumab’s development and partnering history can be read here and the extent of its clinical development is usefully reflected in the internationally-prestigious National Cancer Center of Singapore’s selection of  Nimotuzumab for an international Phase III 700-patient trial.

What impeded the penetration of the major pharmaceutical markets by Cuban life-sciences products was the unwillingness of the State to commit to the necessities for commercialization in the target markets. To have fully recognized and embraced the opportunities that the JVs were capable of delivering with their structures of binding together the Cuban, Canadian and, subsequently, US managements, business-development programs with “Pharma”, and access to capital, could have achieved the sought-after result. Although numerous successes resulted the full opportunity was left wide of the mark solely because of the see-saw between the likely best business results and what was consistent with political principles. Where the principles may not have been in Cuba's best immediate financial interest they nevertheless obtained because of the hope and expectation that “something better” would present itself with multinational pharmaceuticals stepping to the plate – the kind of velleity, embraced by many, that the 1994 Washington Post column by Julie Feinsilver, would have erroneously encouraged. Twenty-five years on they still have not and, with the acquisition of YM by Gilead Sciences in 2013, the opportunity to build on this foundation terminated.

Alternative initiatives were undertaken, however, led by CIM, that entered an arrangement with Biocon BioPharmaceuticals Ltd., a subsidiary of Biocon Limited of Bangalore, India's largest pharmaceutical company, for the manufacture of its antibody in a facility to which CIM contributed considerable engineering expertise and CIM joint ventured with the Chinese Government in providing the engineering and management to erect a manufacturing facility for the same product in Beijing – in a company known as Biotech Pharmaceuticals Limited. Nimotuzumab ultimately became registered in Cuba in 2002 and is currently marketed in more than 20 countries, including Argentina, Brazil China, Colombia, Gabon, India,  Ivory Coast, Malaysia, Peru , Russia Ukraine, and other similar markets.

In 1998 Science Magazine quoted James Larrick, the president of the Palo Alto Institute for Molecular Medicine as saying that “Cuba’s drug factories are…. some of the best in the world outside of the United States and Britain”; Harold Varmus (Nobel Prize-winning former Director of the US National Cancer Institute) as saying “it’s a very impressive place….” although Allan Bernstein, the head of the Samuel Lunenfeld Research Institute in Toronto (who then joined an exploratory party organized by YM in that year) as recognizing that the “billion-dollar biotech gamble” was “a very risky investment for the Cuban government”. In 1998, YM was the only company in any major-market country working on Cuban-origin biopharmaceuticals and in 1999 Scrip Magazine, in Singing the praises of Cuba’s science base, stated “as yet its ground-breaking scientific achievements in biotechnology have gone largely unsung”.  

In July 2000 the US National Cancer Institute, in a column entitled “Despite Embargo, Biotechnology in Cuba Thrives”  specifically pointed out that “Cuba, unlike China, honors foreign patents and has its own Office for Intellectual Property” – a reflection of the high standards in the country that extended to manufacturing, disciplined clinical trials and a firm central regulatory administration. The article went on to describe that  “under York Medical’s [YM BioSciences’] aegis, the [CIMAVax] vaccine (from CIM) and three versions of a CIM monoclonal antibody, 1 radiolabeled, are in clinical trials in Canada".

Additionally in 2000 the headline for a column by the UK’s distinguished reporter, Julian Borger, at The Guardian, was “Cuba winning cancer race” citing “…. the laboratories in …..Havana have made startling strides in developing revolutionary vaccines and antibodies against meningitis, hepatitis, and lung, breast, head and neck cancers” proceeding to describe SmithKline Beecham and YM BioSciences’ breakthroughs with the Cuban government for the development of Cuba’s medical assets.

In 2001 the UK Financial Times wrote on “Cuba’s medical revolution” with the subheading – “…at the cutting edge of biotechnology that amazes visiting scientists” while YM continued to be the sole major-market country partner for any of the 38 biotechnology centers.


  • Children's Hospital Denver, Colorado, CO

  • Doernbecher Children's Hospital at Oregon Health and Science University

  • Johns Hopkins Hospital, Baltimore, MD. 

  • Memorial Sloan-Kettering, NY

  • MD Anderson, Houston, TX

  • NYU Medical Center, Hassenfeld Clinic, NY

  • University of Florida Gainesville, FL

  • Vanderbilt Children's Hospital, Memphis, TN

There is no evidence that SmithKline Beecham/Glaxo, proceeded with the clinical development of the meningococcal BC vaccine from Instituto Finlay although Abivax of France announced a marketing arrangement for the product some 15 years later in 2014. CancerVax discontinued operations in 2005, prior to any FDA filings or clinical activity with CIMAVax. YM, however, became the first company or organization to receive clearance from the US FDA for clinical trials in the US with a Cuban-origin drug following through with a number of trials at major centers across the country. YM equally became the only company to the date of this document to receive  US  Orphan  Drug  Designation for a Cuban-origin drug,  which it did in 2004 and, importantly, for the confirmation of its undertaking to the Cuban govern-

ment of providing a bridge to the financial markets for the support of the development processes required to achieve regulatory approvals, became, in 2004, the first company developing Cuban-origin medicaments to be listed in the United States' securities markets (AMEX; NYSE MKT) following its being the first North American biotech to list in the London Stock Exchange.

Proposals for the development of Cuban-origin biopharmaceuticals have recently re-emerged with Abivax of France in 2014 announcing a license from CIGB for Hebernasvac (hepatitis B therapeutic vaccine) (ABX208) in addition to the marketing arrangement with Instituto Finlay and Roswell Park Cancer Institute announcing the reinstitution of clinical development of CIMAVax in 2015. The Malaysian company, Bioven, had also announced FDA clearance in 2016 for a Phase III trial on the same product, CIMAVax, as it had previously licensed the product for development in 2007. Indeed, Cuba’s scientific inventiveness and resilience is evidenced by the 2015 World Health Organization validation of Cuba’s success discovering and implementing the process to eliminate the transmission of both the AIDS virus and syphilis from pregnant women to their foeti. “Eliminating transmission of a virus is one of the greatest public health achievements possible,” Dr Margaret Chan, WHO Director-General is quoted as saying. “This is a major victory in our long fight against HIV and sexually transmitted infections…”

Commercially, however, the high expectations, both within Cuba and the international community, for major-market penetration have not yet been rewarded. Indeed, even though the hepatitis vaccine had been the subject of much international acclamation, reportedly currently marketed in numerous countries, the Abivax trial (on Hebernasvac) was terminated in mid-2016 for futility and the Finlay agreement for the meningococcal vaccine and other products no longer appears referenced in Abivax’ presentations. Having posed as “the first ‘Western’ biopharmaceutical company to have established a major collaboration with Cuban biotech”, management congratulating itself on its “visionary approach” (exactly 20 years post YM’s signing with the five leading Scientific Centers), half a decade behind YM on US clearances, spending three years on mere licenses when unprecedented joint ventures were concluded in a year, then the failure for futility would be a bitter blow to CIGB and Cuba’s critical initiatives but a fitting response to the hyperbole in Abivax’ ostentatious posturing as the above history would confirm.

The outcomes for CIMAVax in the US and UK trials will remain unknown for many years and it is currently unclear which of Bioven or Roswell owns US marketing rights. Notwithstanding, and even with the passage of ~20 years since the initial YM joint ventures broke the mold in 1994, the magnetic attraction of Cuba's huge outputs in life sciences remains. However, the few commercial arrangements in highly-regulated major markets have yet to result in any of the products being marketed in those jurisdictions, except for China, and access to the US capital markets, pioneered by YM in 2003 with a full listing in 2004.

David G. P. Allan
Founding Chairman and CEO (1998 -2011) of YM BioSciences

December 15, 2019
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