Westport Innovations | Tekmira

No. 7: Westport Innovations Inc.

There are different categories of innovation. Some are revolutionary; some not. Westport Innovations Inc. is not a revolutionary innovator. Its business is lessening the quantity and impact of what spews out the exhaust pipes of vehicles with big diesel engines. While the company can’t radically transform the existing transport model, it can make it so that thousands of those engines run on natural gas – a fuel that’s cleaner, cheaper and more plentiful than diesel.

Some people talk about fundamentally reordering the global transport system, which today ends on the road with acrid clouds of diesel fumes; Westport president David Demers believes in playing the hand you’re dealt. And the hand we have is trucks. “You can’t just wave a magic wand and everybody moves into the new world,” he says. The answer isn’t revolution but incremental improvement.

Westport grew out of a 1980s research program at UBC, and over the years enthusiasm for the company’s services has ebbed and flowed. Today more than 20,000 Westport-Cummins fuel systems have been sold in 35 countries through a network of 55 original-equipment manufacturers. Westport’s revenues were $71.5 million in 2008, the year it was celebrated as one of Deloitte Touche Tohmatsu’s blossoming Green 15 – and damned, in the Globe and Mail, as one of Canada’s most dangerous stocks. “One can argue about their financial success,” notes one of our expert panellists, “but they’re trying to solve a problem in terms of emissions in the very dirty world of diesel engines. And they’ve developed a very novel approach to it.”

The core of Westport’s innovation – swapping out diesel for natural gas – is textbook harm reduction and as such shares DNA with Insite, the controversial safe-injection facility on Hastings Street in Vancouver’s Downtown Eastside. The philosophy: little steps to head off disaster. “I’ll get shot if you link our names,” says Demers, “but that comparison is exactly right. It’s pragmatism: we can get a lot of benefit now or we can wait for 20 years while it all falls apart.”

No. 8: Tekmira Pharmaceuticals Corp.

The world’s big pharmaceuticals are racing to put a new type of medicine into the marketplace. But to make it work, they’ll need the help of a small Burnaby-based biotech called Tekmira Pharmaceuticals Corp.

All the fuss is about RNA interference. RNA is a nucleic acid that creates proteins, and RNA interference involves using custom-made RNA (called siRNA) to stop the creation of certain disease-causing proteins. This promises to revolutionize the treatment of a wide range of diseases, including influenza, diabetes and cancer. Two American researchers won a Nobel Prize in 2006 for their work in the field. The big problem, however, is that the medicine can’t survive long enough in the body to have any effect without some kind of protection – and protection, in the form of a proprietary delivery technology, is precisely what Tekmira has developed.

Currently the company is in the process of negotiating licensing contracts with the major world drug players pursuing RNA interference, with Alnylam Pharmaceuticals Inc., F. Hoffman-La Roche Ltd. and Merck & Co. Inc. already signed into agreements. Tekmira, which employs about 80 staff, posted a loss of $14.3 million in 2008 and a loss of $2.6 million in 2007, but should any of its partners market a commercially successful RNA interference drug using its technique, Tekmira can expect a share of the profits. Although the fate of new medicines is always uncertain, Tekmira seems to be in an enviable position. Cormack Securities Inc. biotech analyst David Dean commented in a January 2009 report that he expects RNA interference to be the next wave of drug technology and that, with the best-known delivery method to date, “Tekmira’s technology may be critical to the entire siRNA industry.”

Delivery technology aside, our experts panel was generally impressed by Tekmira’s ability to place itself in a pivotal business relationship with much bigger pharmaceuticals and by its decision to develop its own RNA interference drugs, so that it can compete with its larger partners as well as supply them. (Two of its products are expected to enter human clinical testing this year.) “The guys who are the smartest on the planet in this scientific area,” notes one panellist, “are in Burnaby.”