It has been over a year since the COVID-19 virus first hit, and things are slowly coming into focus. The world is learning to navigate the perils of the new normal. Even better, different vaccines are already being deployed in most parts of the world.
Still, this encouraging development in the vaccine front has made experts in Canada realize one important thing: more vaccine doses are needed, and fast.
It is this realization that compelled local biotech companies to continue working towards a Canadian-made vaccine.
While the government is working hard to secure COVID vaccines from international partners, it is not yet at a pace that inspires confidence from most Canadians. Another challenge is that Canada is presently not capable of manufacturing these vaccines locally.
Between the emergence of more contagious variants and the steep global demand, developing a local vaccine would be a game-changer in the fight against the virus.
It will make Canada less dependent on foreign vaccine brands like Pfizer and Moderna. It will also help Canadians gain “herd immunity” faster and take the next step towards a healthy future sooner.
Leveraging Canada’s Government Programs
Through government initiatives like IRAP funding and the SR&ED program, local companies are gaining a lot of headway in the efforts to develop a Canadian vaccine. First in line is Entos Pharmaceuticals, an Edmonton-based biotech company specializing in advanced nucleic acid-based therapies using a proprietary drug delivery system.
Entos is set to start Phase 1 of their clinical trials after the federal government guaranteed funding in the tens of millions of dollars. They are currently working on two DNA vaccines, one of which is awaiting transport from a lab in Ottawa to Halifax for the next phase of the approval process.
In DNA vaccines, a small part of the virus’s own genetic material is replicated and produced. Once injected, it convinces the immune system that the body is being attacked by the virus itself, triggering the production of proteins directly in the cells. This process activates the antibodies to fight the virus.
DNA vaccine production is faster and cheaper compared to traditional vaccines, where a weakened version of the virus is used. DNA vaccines are also more stable. They can last for a year when refrigerated and a month at room temperature without losing their activity. On the other hand, traditional vaccines require refrigeration. These advantages compelled Entos to develop DNA vaccines instead of conventional ones.
Aside from Entos Pharmaceuticals’ DNA vaccine, there are others being developed within the area. Worth mentioning is the one being studied at the University of Alberta’s Li Ka Shing Applied Virology Institute. They are developing a vaccine that targets the S spike protein’s receptor-binding domain. It has performed well under laboratory settings against Wuhan’s original strain and the newer strain from the UK. Its efficacy is currently being tested against the South African strain.
To date, around 1.5 million doses of the COVID vaccine have been administered across Canada. Experts believe that this process of vaccination will go on until 2022. And with billions more all over the world that need to be inoculated, it makes sense to continue the pursuit of a made-in-Canada vaccine.
The Importance of SR&ED Grants Canada and Other Government Programs
Research is an integral part of healthcare, especially in the pursuit of the COVID-19 vaccine. It allows scientists to identify the antigen that can potentially prevent the disease. It drives the clinical trials that establish the appropriate dosage, the efficacy of the vaccine, and its potential side effects. None of the vaccines today would be available without extensive research activities.
Still, R&D involves a lot of expenses. Projects like vaccine development require experienced researchers to carry out experiments, analyze data, and prepare publications or presentations. This level of expertise comes at a high price.
Aside from the personnel, the consumable materials needed for research are also expensive. From disposable plastics for tissue cultures to specialized media for growing antibodies, the costs can add up to a significant amount.
Finally, the cost of the lab equipment needed to conduct biological research can be daunting. The maintenance alone needed to keep them in good running condition could go up to thousands of dollars in contractor costs.
With all the expenses involved in vaccine development, biotech companies in Canada need all the help they can get. This is where government grants like the Scientific Research and Experimental Development or SR&ED come in.
The SR&ED program is a tax incentive program helping businesses pursue research and experimental development activities geared towards improving the quality of life throughout Canada. It offers SR&ED refunds for the salaries and wages of R&D specialists, materials, contractor costs, and certain overhead costs.
The SR&ED tax incentives can be deducted from the successful applicant’s income tax or claimed as an investment tax credit. In some situations, a tax refund is given.
The SR&ED program is open to Canadian controlled private corporations or CCPCs with eligible SR&ED projects. Vaccine development falls squarely inside its eligibility criteria:
- The presence of a scientific and technological uncertainty
- The presence of a hypothesis to eliminate the uncertainty
- The use of systematic investigation to implement the hypothesis
- The adoption of an approach that could lead to scientific and technological advancements
- Records were kept as the project progressed
Canadian companies eligible for SR&ED can earn a refundable ITC of up to 35% of the first $3 million in qualifying expenditures. For eligible SR&ED costs over $3 million, a 15% non-refundable ITC is awarded, deductible from the tax payable for the fiscal year.
Additionally, CCPCs that qualify under the criteria of the Canada Revenue Agency can earn tax incentives of 15% ITC for eligible costs over $3 million. Out of this amount, 40% can be refunded.
Other corporations can claim for an SR&ED tax credit. Those with eligible research and development R&D projects can earn a non-refundable ITC of 15% for all related costs. Trusts, partnerships, and proprietorships can also qualify. For more information on the funding details, give us a call at EVAMAX.
With all the financial support available through the SR&ED program, it is essential that Canadian businesses learn not only how to submit an SR&ED claim but how to get the highest amount of money. This is where EVAMAX can help.
With more than 17 years of experience in innovation grants, EVAMAX has helped over 900 clients claim over $115 million in government funds.
Do you need help in accessing SR&ED tax credits for your business?
Call us today at EVAMAX. Our funding specialists can guide you throughout the application process, from preparation to approval.