Annual Report 2010-11_ENGLISH

Better medicine is in our genes
C e n tr e o f E xc e l l e nc e i n P e r so na l i z e d M e d i c i n e
ANNUAL RE P ORT 2 0 1 0 – 2 0 1 1
Personalized medicine is enabling better healthcare by analyzing a person’s genes
to predict, prevent and treat disease in the most effective way possible for specific
patients or groups of patients.
CEPMED is a non-profit organization dedicated to promoting the science and practice of personalized medicine through
research, commercialization and education. It currently participates in several multi-million dollar public-private partnerships in
translational medicine that incorporate pharmacogenetic testing into Phase III clinical trials and studies of marketed products.
In addition, it funds strategic personalized medicine projects with high commercialization potential or the potential to save
costs to the healthcare system. Finally, CEPMED promotes the principles of personalized medicine to healthcare practitioners,
consumers and stakeholders across the country.
Originally founded by the Montreal Heart Institute and Génome Québec, CEPMED makes use of the Beaulieu-Saucier
Pharmacogenomics Centre, the Montreal Heart Institute Coordinating Centre and the Montreal Heart Institute Biobank in its
projects. It is a Centre of Excellence for Commercialization and Research (CECR) and supported by the Canadian Government,
Génome Québec as well as private partners, including Pfizer, AstraZeneca, Novartis and Merck.
C E P M E D A N N U A L R E P O R T 2 010 – 2 011
Excerpted and abridged from Homemakers, June 2011
F r o m Se c r e t s i n y o u r g e n e s
Claudine’S story
By Julie Beun
Genetic science can tell you your individual risk for hundreds of diseases. But do you really want to know? That was the question facing
Claudine Brunelle.
“The technician asked me if I still wanted to know, because some women change their minds. She told me I was positive and had an 87 per
cent chance of getting breast cancer [by age 80]. My mom had it the first time when she was 51, my one aunt had it at 42 and my other
aunt at 38, so that indicated the mutation was very aggressive. I was in shock I cried for a minute,” she recalls. “Then I said, “What now?
What do I do?
“The test gives you a chance
to change things in your life”
There were no good options. When the gene is mutated, DNA damage builds up. Then cells can divide out of control to form cancer,
particularly breast cancer and ovarian cancers. And so although she was newly married, Claudine had her ovaries removed in March 2008.
In May, she had a radical mastectomy. A subsequent biopsy found one precancerous lesion.
“The test gives you a chance to change things in your life,” Claudine says. From a family of smokers, she’s quit the habit, changed her diet
and begun exercising and meditating regularly. “I feel more peaceful than I was before,” she says. “I’m in better shape now.
Knowing the odds, Claudine shared her outcome with her family, One of two brothers, who has three daughters did the test and it came
back positive, Others “didn’t want to know. For many, fear is more powerful than knowledge.
“I took charge. I acted. It wasn’t a second chance; its about being in control of my body. It’s a hard road to take, but I’m lucky,” she says.
I’m lucky to have so much control over my health and my body.”
Reprinted with the permission of Homemakers
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C E P M E D A N N U A L R E P O R T 2 010 – 2 011
Excerpted and abridged from Homemakers, June 2011
F r o m Se c r e t s i n y o u r g e n e s
Amanda’S story
By Julie Beun
Diagnosed with early onset Alzheimer’s disease at age 36, Amanda’s mother was living in a long-term centre in Matheson, Ontario. She was
41. When she was 19, Amanda received her own wrenching news. A genetic test revealed at least a 90 percent chance that she, too, will
begin to forget who she is at an age when most women are finally sure of who they are. “It was pretty scary. I was 19 and pretty broken
down from what was happening to my mom. But I had a boy, and I had to take care of him. I had to know. He was my motivation to get it
done.” Determined to ensure a legacy for her son, Amanda has doggedly kept journals. She plans to pass them on to Sheldon when he is
18, a couple of years before the time she may begin to deteriorate.
“I am writing down all the firsts, the good times and the bad times. It’s for him to see life from my eyes when I was younger, those
memories will fade for me,” she says. “Eventually, if my son has a question, he can go through those journals.
“I’m sure when [Alzheimer’s] happens, it’ll be very frustrating for me. But I’ll have the people and the tools I need to cope. You have your
birthdate and the day you die on your tombstone, I’m just interested in the dash.” She says smiling. “The bit in between.”
“I am writing down all the firsts, the good times and the
bad times... those memories will fade for me”
Reprinted with the permission of Homemakers
2
Ta b l e o f C o n t e n t s
5
Personalized medicine is changing the face
of THE health care system at every level
A Message from Clarissa Desjardins
7
How is personalized medicine changing the face of clinical reasearch?
A Message from Jean-Claude Tardif
11 How is personalized medicine changing the face of Health care?
A message from Dr. Mario Talajic
13 How is personalized medicine changing health economics?
14 CEPMED – What we have done this year
16 Call to Action – What canada must do
18 Governance and financials
31 Corporate information
C E P M E D A N N U A L R E P O R T 2 010 – 2 011
Introduction
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C E P M E D A N N U A L R E P O R T 2 010 – 2 011
Pe r s o n a l i z e d m e d i c i n e i s c h a n g i n g t he f a c e
o f t he he a l t h c a r e s y s t e m a t e v e r y l e v e l
Message from Clarissa Desjardins
President and CEO
“… if everybody’s DNA sequence is already in their medical record and it is simply a click of the mouse to [find] out all the information you
need, then there is going to be a much lower barrier to beginning to incorporate that information into drug prescribing. If you have the
evidence, it will be hard, I think, to say that this is not a good thing. And once you’ve got the sequence, it’s not going to be terribly expensive.
And it should improve outcomes and reduce adverse events.” – Francis Collins
In fact, as stated by Francis Collins, one of the pioneers of the Human Genome Project, some day soon, peoples’ genes will become an
integral part of their medical record. Along with other medical information, such as family history, medications in use and lifestyle choices,
the integration of genetic information will better inform a host of decisions taken by patients and their physicians about their health.
Genetic testing in specific areas such as oncology or cardiovascular disease has already been shown to result in better diagnosis and
prevention of disease and more appropriate use of drugs and reduced side-effects. In many cases, but not all, the cost of a single test is
more than offset by the cost savings to the healthcare system. Also, the technology for gene sequencing is advancing so rapidly that, soon,
the costs of sequencing all a person’s genes will equal the costs of performing just a few genetic tests today. At that point, it will be more
practical to sequence the entire genome, once in a lifetime, since genes do not change, and then use the information throughout life for
prevention, prediction and better drug selection and treatment.
Many of the most prevalent diseases in Canada—obesity, cardiovascular disease and diabetes—have an important behavioral component.
Empowering patients with information on their genetics has been shown to affect their choices and lead to better disease management.
Making the right lifestyle choices, making sure the right patients are getting the right medications and treating and preventing disease at the
right time is the goal of personalized medicine.
Are we prepared to incorporate this valuable information into our healthcare system? Unfortunately, the answer is no. There are many
hurdles to the adoption of personalized medicine including a lack of awareness among healthcare professionals, lack of medical guidelines
on when and how to use genetic tests, a lack of reimbursement for these tests, lack of electronic medical records as well as unclear
protections against genetic discrimination. CEPMED and other organizations are attempting to address these hurdles through public-private
partnerships in clinical trials, commercialization and education. Personalized medicine is changing the face of health care at every level, and
in this report, we will look at some of those ways, as we review CEPMED’s activities over the last year.
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C E P M E D A N N U A L R E P O R T 2 010 – 2 011
Ivabradine™ is effective in treating angina, but it
can cause a rare visual side effect. Personalized
medicine is helping identify which patients are
most likely to get the greatest benefit from the
drug and which should avoid it because of their
predisposition to the negative
6
side effect.
C E P M E D A N N U A L R E P O R T 2 010 – 2 011
How is personalized medicine changing
t he f a c e o f c l i n i c a l r e s e a r c h ?
Jean-Claude Tardif is the founder of CEPMED and a pioneer in using biomarkers in clinical research
Personalized medicine is changing the face of clinical research in three important ways: It is leading to the development of safer and more
targeted medications. It is leading to shorter cycles in clinical research which put new and better drugs into the hands of doctors and their
patients sooner. It is leading to greater understanding of human biology, which in turn opens new avenues of prevention and treatment.
Safer more targeted medicine
An example of how personalized medicine can lead to safer more targeted medicines can be taken from our CEPMED and Servier-funded
study on Ivabradine™, a product for angina. Ivabradine™ is currently sold in many European countries, but it is not prescribed first in
line and possesses a rare visual side effect. The study we are conducting, in the context of a large Phase III clinical trial in 16,000 patients,
aims to analyze the genetics of a subset of 3,000 of these patients. In this group, we aim to identify genes that are associated with better
responses to the drug and genes that may be associated with side effects. In this way, we will eventually be able to target the treatment
to those who are most likely to have the greatest benefit and who are least likely to experience any side effects. This is a new type of
clinical trial, sometimes called “high-content” clinical trials, in which we are experts. In the future, we believe that most clinical trials will
incorporate some form of personalized approach such as this one to ensure the development of the right drugs for the right patients.
Sh o r t e r c y c l e s o f c l i n i c a l r e s e a r c h
One of the best ways to reduce the cost of clinical trials is to use biomarkers which are key enablers of personalized medicine. Biomarkers
are a measurable biological characteristic which is associated with a disease process or a response to drugs. Biomarkers can be DNA, RNA,
proteins or they can be derived from images. When the association between the biomarker and disease is very strong, it is possible for
regulatory authorities who approve drugs to approve a biomarker as a surrogate marker of disease. For example, one of our most widely
prescribed drug categories, statins, were developed using a surrogate marker of atherosclerosis, that is to say, LDL cholesterol levels, since
they were known to correlate with this disease. In trials where no biomarkers are approved, the clinical endpoints measured, such as heart
attacks and death, are relatively infrequent events and necessitate several thousand patients to measure statistically significant results.
Where biomarkers can be used as intermediate endpoints, the duration and costs are reduced several fold.
Here at the Montreal Heart Institute, we have pioneered the use of imaging and blood-based biomarkers in clinical trials. For example,
in a recent study with the Canadian company Viron, we looked at patients receiving stents for heart blood vessels and treated with their
novel drug, Serp-1. We were able to demonstrate in as little as 48 patients that the drug was safe, but we also showed using biomarkers
7
of muscle degeneration (troponin I and creatinine kinase MB) that the drug was having a significant positive effect on heart muscle. Using
intravascular ultrasound (IVUS), a relatively new imaging tool, we demonstrated the safety of the drug after six months. The speed and cost
of this trial were enabled by the use of these biomarkers.
With CEPMED’s support, we are also developing promising new biomarkers such as Angiopoetin-like II discovered here at the Montreal
Heart Institute. Our goal is to validate the use of this biomarker in a number of patient populations and disease conditions in order to
determine where it can best help physicians diagnose and prevent disease. We also worked with a local private company, Warnex, to
develop an easy-to-use, validated blood based test for this biomarker, which is a necessary step to its eventual out-licensing for commercial
development.
Greater understanding of biology
When you couple a genetic study and other biomarker analyses with a clinical trial you establish relationships between certain genes,
blood-based biomarkers and diseases such as atherosclerosis. But you also discover new relationships between genes and disease that
haven’t been observed before. We are still discovering new gene variants, new RNA and protein expression patterns which are improving
our understanding of human biology at a fundamental level. They are helping us understand why certain people develop heart failure,
while others with similar characteristics do not.
A new gene variant associated with heart failure, for example, can lead to new insights into what causes the disease but can also lead to the
discovery of new classes of drugs. These new genes and proteins involved in disease can now become targets for pharmacological agents
which will modify their activity, the first step toward discovering new treatments.
The personalization of medicine through the use of biomarkers is not only impacting healthcare but also the way novel drugs are
developed. Diagnosing disease earlier or preventing disease from occurring at all, combined with a better selection of drugs that represent
optimal treatment and avoid side effects, will save time and money in drug development, improve health and eventually reduce the overall
cost of healthcare.”
8
When a new drug showed promise in strengthening
heart muscle in patients with stent implants,
personalized medicine eliminated the need for years
of study on thousands of patients to prove that
the drug was safe. Genetic testing of 48 patients
in a six-month study gave doctors the green light
on an effective new way to help improve the lives
of many more patients, while saving time and
lightening the load on our healthcare system.
Without any warning signs or symptoms, young
and seemingly healthy adults sometimes suddenly
die of cardiac arrest, often caused by exercise or
emotional stress. Personalized medicine, through
genetic testing—especially of families with a
history of sudden cardiac arrest— is helping to
identify people predisposed to this condition,
allowing treatment that can help prevent the
disease from claiming more victims.
C E P M E D A N N U A L R E P O R T 2 010 – 2 011
How is personalized medicine changing
t he f a c e o f he a l t h c a r e ?
Dr. Mario Talajic is a cardiac electrophysiologist at the Montreal Heart Institute
One of the things I do here at the Montreal Heart Institute is use genetic testing to better diagnose and treat a series of diseases called
channelopathies and familial cardiomyopathies. These diseases account for the most common cause of death in young, seemingly healthy
adults. One of these is called LQTS or Long QT syndrome which occurs in about 1 in 2,800 people. As a reference point, this is three times
more common than childhood leukemia. The condition predisposes you to sudden cardiac arrest often in response to a specific trigger
such as exercise or emotional distress. Unfortunately, most patients don’t show any symptoms until it is too late. The importance of our
work is that if you have a certain type of LQTS, which we can detect genetically, you can be treated with beta-blockers and essentially
prevent the disease. Medical guidelines for clinical practice in the US recommend genetic testing for all family members of someone
diagnosed with LQTS.
Today, the Montreal Heart Institute is one of only a few hospitals to offer this type of genetic testing in Canada. Since many physicians are
unaware of the availability of these tests, there is a substantial risk of under diagnosing these diseases. A study by BlueCross BlueShield
showed that these genetic tests are cost-effective. For example, when screening family members of diagnosed patients, the cost of the
genetic test was shown to be more than offset by the economic benefits of the lives saved. We use personalized genetic testing as a more
and more important tool in treating people, preventing disease and helping people live longer and more productive lives.
11
Diet and exercise have an important effect on
obesity, cardiovascular disease and diabetes in
many cases. Providing patients with personal
genetic information has been shown to affect their
behavior and lead to healthier lifestyle choices.
C E P M E D A N N U A L R E P O R T 2 010 – 2 011
How is personalized medicine changing
he a l t h e c o n o m i c s ?
The number of emergency room visits due to adverse effects of drugs corresponds to about 7.5 % of all visits or 185,000 visits per year
in Canada. The costs associated with these misuse, underuse and overuse of medications is estimated at around five billion dollars a year.
Preventing unwanted side effects and improving patient wellness is good for all of us but it is also good for our healthcare system and the
economy.
A recent study by pharmacy benefit manager Medco Health Solutions, which manages the health and drug plans of 65 million Americans,
illustrates how putting personalized medicine into practice can save healthcare costs. Warfarin (Coumadin™), an anti-coagulant, is one of
the most commonly prescribed drugs in the world because it is very effective. Traditionally, warfarin management has been complicated
by tremendous differences in how individuals respond to the medication. It is now known that a person’s genetics (and in particular two
genes, VKOR and CYP2C) play a big role in this difference in response. The Medco study was a “real world” study. They called people who
showed up in their computer system as having gotten a first time prescription for warfarin. They asked them: “Are you aware that there’s a
genetic test that can tell you if you’re more predisposed to bleeding while you’re on this drug?” More than 82% of people said they’d like
to take the genetic test. After giving their consent, they were sent a saliva collection kit which they sent back by courier to the Medco labs.
The Medco study showed that when patients and their physicians were informed of their genetic test results, this group showed a 30%
reduction in hospitalizations over the next six months as compared to a group who had not received the information. Medco now routinely
performs genetic testing for patients recently prescribed warfarin.
Many other drugs show variable response in different people and it has been known for years that liver enzymes called CYP450s, are
partially responsible for these differences. Certain people are low metabolizers or ultra-metabolizers of medication, and this can result in
big differences in the concentrations of medication in the blood of different people for the exact same dose.
It makes sense to take into account a person’s genetic background before prescribing medication which is known to vary in effectiveness
among different people.
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C E P M E D — W h a t we h a v e d o n e t h i s y e a r
C E P M E D h a s t h r ee p r i n c ip a l o b j e c t i v e s t h a t
we have advanced in specific ways in 2010-2011.
O u r o b je c t i v e s a r e t he f o l l o w i n g :
• Create public-private partnerships to advance the science and practice of personalized medicine
• Foster and support the commercialization of technology platforms and discoveries from the MHI
• Become a national resource for knowledge dissemination in personalized medicine
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C E P M E D A N N U A L R E P O R T 2 010 – 2 011
Be l o w i s o u r 2 0 1 0 - 2 0 1 1 s c o r e c a r d a s i t r e l a t e d t o a c h i e v i n g o u r
o b je c t i v e s a n d o u r s t r a t e g i c g o a l s
CEPMED’s Objectives for 2010-2011
Achieved
Objective
(Y/N)
Measurable Indicators
Comments
Execute on public-private partnerships in
high content clinical trials
Y
Pfizer, Roche I, Servier,
Roche II as well statins and
warfarin trials
CEPMED already funds 6 large publicprivate partnerships and drug studies in
high-content clinical trials
Support additional personalized medicine
translational projects
Y
Funded one new project
for $1.9mm and initiated
two others
One new project called CAIN II was approved
by the Board and two other projects
previously approved were initiated (Servier
PGx study and the ADME panel project)
Organize, support and fund conferences on
personalized medicine
Y
Over 400 persons attended
two meetings. CEPMED
was invited to speak at
another 8 conferences
Two meetings were organized and
supported, CMOD in Ottawa in
collaboration with Health Canada and
Forum économique de Montréal
Complete a physician survey on knowledge,
awareness and adoption of personalized
medicine
Y
~384 physicians
participated in the survey
A publication of this comprehensive survey
has been accepted for publication in the
British Medical Journal as of February, 2011
Create Physician expert panels to examine
the best clinical practices in personalized
medicine, strategies for the efficient use
of resources as well as current and future
education and research needs
Y
Nine meetings were held
with 21 physicians signing
our terms of reference to
participate in our expert
panels
Three committees, one in cardiology,
oncology and family medicine with 7
physicians each from across the country
and representing different areas of
expertise were created and have each met
three times
New objectives (not planned for this
year). Create a web-based portal of
information of personalized medicine and
genetic testing to help consumers and
physicians better understand what tests are
available, when they should be used and
how to interpret them
Y
A contract was signed with
DNA Direct Inc.
A public-private partnership was concluded
with DNA Direct, a provider of web-based
decision support tools for physicians and
consumers. CEPMED will create Canadian
content related to access to testing in each
province
Work with regulatory authorities and other
stakeholders to develop policies which
support the development of personalized
medicine
Y
A consulting agreement
was signed with Health
Canada
A 106-page comprehensive report on DTC
testing was delivered to Health Canada
Working Group on Personalized Medicine
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C E P M E D A N N U A L R E P O R T 2 010 – 2 011
Call to action—What Canada must do
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In order to benefit from the current and future uses of personalized medicine, CEPMED calls on our governments, the partners in the
health care system and the people of Canada to recognize the importance of the following and realize the potential of personalized
medicine in improving healthcare.
Commercialization
• That the Federal government support measures which encourage innovation such as longer market exclusivity periods for personalized
medicine products
Re g u l a t i o n & Re i m b u r s e m e n t
• That Health Canada issue guidelines for the accreditation and oversight of private and public medical laboratories and ease restrictions
on who can order and receive test results
• That government and industry create a web registry of Canadian medical testing laboratories to inform the public and promote
transparency
• That the medical testing industry work to develop business best practices within its members
• That approval of combined therapeutics and diagnostics be streamlined into a single process
• That provinces reimburse cost-effective personalized medicine tests
E l e c t r o n i c he a l t h r e c o r d s
• That the adoption of personal electronic health records and electronic prescribing be supported at all levels
Privacy and genetic non-discrimination
• That Bill C-508 aimed at clarifying the language in the Canadian Human Rights Act to specify that genetic information may not be used
to discriminate, receive the support of our legislators
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C E P M E D A N N U A L R E P O R T 2 010 – 2 011
Governance and financials
• Governance
• Independent auditor’s report
• Statement of income and net assets
• Balance sheet
• Statement of cash flows
• Notes to the financial statements
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C E P M E D A N N U A L R E P O R T 2 010 – 2 011
Governance
Michel Saucier
Chairman of the Board
Bridget Viens
Observer for the Federal government,
Senior Program Manager, Networks of
Centres of Excellence (NCE)
Jean-Yves Leblanc
Vice-President of the Board
Ghislain Boudreau
Vice-President, Public Affairs, Pfizer Canada
Jean-Marc Proulx
Treasurer of the Board
President & CEO, Génome Québec
A u d i t C o m m i t t ee
Claude C. Bismuth
Consultant, Bismuth Consulting
Claude C. Bismuth
Consultant, Bismuth Consulting
Denis Bilodeau
Vice-President, Administration,
Génome Québec
Ghislain Boudreau
Vice-President, Public Affairs, Pfizer Canada
B oa r d o f D i r e c to r s
Clarissa Desjardins
CEO, CEPMED
M E MB E RS
Denis Garceau
Senior Vice-President, Drug Development,
Bellus Health Inc.
S t r a t e g i c C o m m i t t ee
M E MB E RS
Alain Caillé
Consultant
Clarissa Desjardins
CEO, CEPMED
Catalina Lopez-Correa
Vice-President, Scientific Affairs,
Génome Québec
Bernard Prigent
Vice-President, & Medical Director,
Pfizer Canada
Jean-Claude Tardif
Director, MHI Research Centre Pfizer Chair
and of the Canadian Institutes of Health
Research in Atherosclerosis, Professor of
Medicine, MHI
Marc Zarenda
Scientific Director, Medical Science,
AstraZeneca Canada
I n v e s t m e n t C o m m i t t ee
M E MB E RS
E X E CUTIV E COMMITT E E
Denis Garceau
Senior Vice-President, Drug Development,
Bellus Health Inc.
Denis Bilodeau
Vice-President, Administration,
Génome Québec
M E MB E RS
Jacques Mizrahi
Head of Discovery, Metabolic
and Vascular diseases, Hoffman La Roche
Clarissa Desjardins
CEO, CEPMED
Jean-Claude Tardif
Director, MHI Research Centre Pfizer Chair
and of the Canadian Institutes of Health
Research in Atherosclerosis, Professor of
Medicine, MHI
Michel Saucier
Chairman of the Board
Jean-Yves Leblanc
Vice-President of the Board
Jean-Claude Tardif
Director, MHI Research Centre Pfizer Chair
and of the Canadian Institutes of Health
Research in Atherosclerosis, Professor of
Medicine, MHI
Stanislav Glezer
Vice-President, Medical Affairs,
Sanofi-Aventis
19
Jean-Marc Proulx
Treasurer of the Board
President & CEO, Génome Québec
Clarissa Desjardins
CEO, CEPMED
C E P M E D A N N U A L R E P O R T 2 010 – 2 011
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C E P M E D A N N U A L R E P O R T 2 010 – 2 011
financial Statements
Independent auditor’s report
To the Members of the Center of Excellence in Personalized Medicine
Report on the Financial Statements
We have audited the accompanying financial statements of the Center of Excellence in Personalized Medicine, which comprise the balance
sheet as at March 31, 2011, and the statements of income and net assets and cash flows for the year then ended, and a summary of
significant accounting policies and other explanatory information.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in accordance with Canadian generally
accepted accounting principles, and for such internal control as management determines is necessary to enable the preparation of financial
statements that are free from material misstatement, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with
Canadian generally accepted auditing standards. Those standards require that we comply with ethical requirements and plan and perform
the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The
procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s
preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances,
but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the
appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating
the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the financial statements present fairly, in all material respects, the financial position of the Center of Excellence in
Personalized Medicine at March 31, 2011, and the results of its operations and its cash flows for the year then ended in accordance with
Canadian generally accepted accounting principles.
Report on Other Legal and Regulatory Requirements
As required by the Canada Business Corporations Act, we report that, in our opinion, the Canadian generally accepted accounting
principles have been applied on a basis consistent with that of the preceding year.
June 23, 2011
Chartered accountant auditor permit No. 13852
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C E P M E D A N N U A L R E P O R T 2 010 – 2 011
Statement of income and net assets
year ended March 31, 2011
2011
2010
$
$
Federal grants
4,438,842
2,470,899
Contributions
374,610
271,265
4,813,452
2,742,164
3,722,382
2,183,411
Expenses
481,511
43,605
Salaries and fringe benefits
176,655
–
4,380,548
2,227,016
408,881
272,511
–
24,161
Professional fees
69,022
227,040
Travel and entertainment expenses
19,585
6,280
Office supplies
1,286
4,562
Telecommunications
5,518
3,465
Insurance for directors
2,202
3,491
–
–
Revenue
Expenses
Translational projects
Training and knowledge delivery
Operating expenses
Salaries and fringe benefits
Severance pay
Training
164
100
506,658
545,560
4,887,206
2,772,576
(73,754)
(30,412)
Interest on bank investments and cash
294,425
382,037
Excess of revenue over expenses
220,671
351,625
Net assets, beginning of year
836,059
484,434
1,056,730
836,059
Bank charges
Deficiency of revenue over expenses before interest
on bank investments and cash
Net assets, end of year
22
C E P M E D A N N U A L R E P O R T 2 010 – 2 011
B a l a n c e Shee t
as at March 31, 2010
2011
2010
$
$
Cash
3,719,618
4,756,261
Bank investments (Note 3)
2,600,000
3,000,000
101,692
110,974
Accounts receivable
14,445
3,093
Receivable from l’Institut de Cardiologie de Montréal
14,414
–
Prepaid expenses
32,061
48,318
6,482,230
7,918,646
2,105,000
4,705,000
85,729
187,422
8,672,959
12,811,068
175,807
21,135
7,440,422
11,953,874
7,616,229
11,975,009
1,056,730
836,059
8,672,959
12,811,068
Assets
Current assets
Interest receivable on bank investments (Note 3)
Long-term bank investments (Note 3)
Long-term interest receivable on bank investments (Note 3)
Liabilities
Current liabilities
Accounts payable and accrued liabilities
Deferred revenue (Note 4)
Commitment (Note 6)
Net assets
Approved by the Board
Michael Saucier, Chairman of the Board
Claude C. Bismuth, MBA, FCA
23
C E P M E D A N N U A L R E P O R T 2 010 – 2 011
Statement of cash flowS
year ended March 31, 2011
2011
2010
$
$
220,671
351,625
(4,813,452)
(2,742,164)
(4,592,781)
(2,390,539)
110,975
105,839
Accounts receivable
(11,352)
5,092
Receivable from l’Institut de Cardiologie de Montréal
(14,414)
–
16,257
(46,657)
154,672
(54,820)
(4,336,643)
(2,381,085)
3,000,000
3,000,000
300,000
900,000
(1,036,643)
1,518,915
Cash, beginning of year
4,756,261
3,237,346
Cash, end of year
3,719,618
4,756,261
Operating activities
Excess of revenue over expenses
Adjustment for:
Recognition of grants and contributions
Net change in non-cash working capital items
Interest receivable on bank investments
Prepaid expenses
Accounts payable and accrued liabilities
Investing activities
Disposal of bank investments
Financing activities
Receipt of grants and contributions
Net (decrease) increase in cash
24
C E P M E D A N N U A L R E P O R T 2 010 – 2 011
N o t e s t o t he f i n a n c i a l S t a t e m e n t s
March 31, 2011
1.Description of the entity
The Centre of Excellence in Personalized Medicine (“CEPMED”) was incorporated on February 27, 2008 under Part II of the Canada
Corporations Act and began operations in April 2008.
The program will end in March 2013 unless the project is renewed.
The CEPMED is a not-for-profit organization set up following approval of the proposed centre by the Network of Centres of Excellence
(“NCE”) and having the mission of furthering personalized medicine by collectively investing more than CDN$20 million over a fiveyear period. The CEPMED was borne of the desire of two partners, the Montreal Heart Institute and Génome Québec, to promote the
development of personalized medicine while relying on existing strategic infrastructures, including those at 1) the Montreal Heart Institute
Coordinating Centre (“MHICC”), 2) the Beaulieu-Saucier Pharmacogenomics Centre of the Montreal Heart Institute and 3) the Montreal
Heart Institute genetic cohort dedicated to biomarker research. In addition to the federally funded agencies and its two founding members,
the Montreal Heart Institute and Génome Québec, CEPMED also partners with large pharmaceutical companies (the “private sector”). All of
these partners share the common goal of contributing to the economic development of personalized medicine by pooling their expertise
and services and by sharing approaches to business development.
In order to record revenue, the CEPMED is required to meet certain criteria of the Centres of Excellence for the financing of eligible
expenses. In this context, the commercialization costs are eligible at 50% and all other costs are eligible at 75%. Some current expenses are
not eligible for financing. However, the interest revenue on investments will be used for these expenses.
Initial expected grants and contributions
Federal
grants
Contributions from
founding members
Contributions from
the private sector
Total ($)
In cash
13,805,000
1,000,000
1,545,000
16,350,000
In kind
–
2,500,000
2,570,000
5,070,000
13,805,000
3,500,000
4,115,000
21,420,000
Total
The in-kind contributions will not be accounted for in the financial statements since their value cannot be estimated.
25
C E P M E D A N N U A L R E P O R T 2 010 – 2 011
N o t e s t o t he f i n a n c i a l S t a t e m e n t s
March 31, 2011
2.Accounting policies
CEPMED elected to take advantage of the Canadian Institute of Chartered Accountants (“CICA”) exemption from Sections 3862 and 3863
of the CICA Handbook granted to not-for-profit organizations, which would otherwise be applied to CEPMED’s financial statements for the
year ended March 31, 2011. CEPMED satisfies the requirements of Section 3861 of the CICA Handbook.
The financial statements have been prepared in accordance with Canadian generally accepted accounting principles (“GAAP”) and include
the following significant accounting policies:
Revenue recognition
CEPMED uses the deferral method to recognize contributions. Restricted contributions are recognized as revenue in the period in which
the related costs are incurred. Unrestricted contributions are recognized as revenue when they are received or receivable if the amount
receivable can be reasonably estimated and its collection is reasonably assured.
Financial instruments
The financial assets and financial liabilities are initially recorded at fair value and are subsequently remeasured according to their
classification, as described below. Their classification depends on the intended purpose when the financial instruments were acquired or
issued, their features and the designation by the CEPMED. Recognition as of the settlement date is used.
Classification
Cash
Held for trading
Bank investments
Held to maturity
Interest receivable on bank investments
Loans and receivables
Accounts receivable
Loans and receivables
Receivable from l’Institut de Cardiologie de Montréal
Loans and receivables
Accounts payable and accrued liabilities
Other liabilities
Held for trading
Held-for-trading financial assets are financial assets that are typically acquired for resale prior to maturity or that are designated as held
for trading. They are measured at fair value as of the balance sheet date.
26
C E P M E D A N N U A L R E P O R T 2 010 – 2 011
N o t e s t o t he f i n a n c i a l S t a t e m e n t s
March 31, 2011
Held to maturity
Held-to-maturity financial assets are non-derivative financial assets with fixed or determinable payments and a fixed maturity, other than
loans and receivables that CEPMED has the positive intention and ability to hold to maturity. These financial assets are measured at
amortized cost using the effective interest method.
Loans and receivables
Loans are receivables are accounted for at amortized cost using the effective interest method.
Other liabilities
Other liabilities are recorded at amortized cost using the effective interest method and include all financial liabilities.
In-kind contributions
The CEPMED will receive in-kind contributions such as equipment, supplies and labour. These in-kind contributions and the related costs
are measured at their fair value when such value can be reasonably estimated, which is not the case of CEPMED. For the projects in
which CEPMED acts as participants only, the in-kind contribution given for the project by other partners are not presented in the financial
statements.
Use of estimates
The preparation of financial statements in conformity with Canadian GAAP requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements
and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from these estimates.
Future accounting changes
The CICA has approved a new accounting framework applicable to not-for-profit organizations. Effective for fiscal years beginning on
January 1, 2012, not-for-profit organizations will have to choose between International Financial Reporting Standards (“IFRS”) and
accounting standards for not-for-profit organizations, whichever suits them best. Early adoption of these standards is permitted. CEPMED
currently plans to adopt the new accounting standards for non-for-profit organizations for its fiscal year beginning on April 1, 2012. The
impact of this transition has not yet been determined.
27
C E P M E D A N N U A L R E P O R T 2 010 – 2 011
N o t e s t o t he f i n a n c i a l S t a t e m e n t s
March 31, 2011
3.
Bank investments
Non-redeemable, fixed rate guaranteed investment certificates (“GICs”) with a chartered bank
Date of issue
Maturity date1
Interest rate
Principal
Interest receivable
%
$
$
2008-04-21
2011-04-21
4.10
1,300,000
50,233
2008-04-21
2011-10-21
4.20
1,300,000
51,459
2008-04-21
2012-04-23
4.25
1,105,000
44,261
2008-04-21
2012-04-22
4.40
1,000,000
41,468
4,705,000
187,421
2,600,000
101,692
2,105,000
85,729
Short-term
“Non-redeemable” means that the GICs cannot be redeemed before the maturity date. On maturity, the principal and interest is
deposited into the bank account.
(1)
4.Deferred revenue
Deferred revenue from grants includes the unrestricted portion to eligible cash contribution expenses:
Contributions from
founding members
Contributions from
the private sector
$
$
$
$
2008-2009
13,805,000
–
545,000
14,350,000
2009-2010
–
400,000
500,000
900,000
2010-2011
–
–
300,000
300,000
13,805,000
400,000
1,345,000
15,550,000
2008-2009
(415,472)
–
(138,490)
(553,962)
2009-2010
(2,470,899)
(108,505)
(162,760)
(2,742,164)
2010-2011
(4,438,842)
(149,845)
(224,765)
(4,813,452)
(7,325,213)
(258,350)
(526,015)
(8,109,578)
6,479,787
141,650
818,985
7,440,422
Federal grants
Grants and contributions
Total
Eligible expenses
28
C E P M E D A N N U A L R E P O R T 2 010 – 2 011
N o t e s t o t he f i n a n c i a l S t a t e m e n t s
March 31, 2011
5.
Pledges receivable
As at March 31, 2011, the founding members and the private sector undertook to contribute a total of $4,355,712 to CEPMED, including
$3,555,712 in the form of in-kind contributions.
6Commitment
The Board of Directors has initially approved grants and contributions for a total amount of $16,350,000 for the financing of various
projects, of which $15,550,000 has been cashed at this date. As of March 31, 2011, a cumulative amount of $8,109,578 has been disbursed.
A balance of $8,240,422 needs to be disbursed from the initial commitments.
7Related party transactions
The CEPMED has entered into transactions with the Montreal Heart Institute and Génome Québec, the two founding members, which
are defined as being related entities. These transactions were carried out in the normal course of business and were recorded at the
exchange amount, representing the consideration established and accepted by the related parties. During the year, the CEPMED received a
contribution of nil ($400,000 in 2010) from Génome Québec. A contribution of $200,000 has been received after year-end.
The founding members have a significant influence on the CEPMED’s operations, as each member appoints four of the twelve members of
the Board of Directors.
8.Financial instruments
Interest rate risk
Bank investments bear interest at fixed rates. Therefore, a change in market interest rates will have an impact on the fair value of these investments.
Fair value
The fair values of bank investments, interest receivable on bank investments, accounts receivable, receivable from l’Institut de Cardiologie
de Montréal and accounts payable and accrued liabilities approximate their carrying value because of their short-term maturities.
9.
Comparative figures
Certain comparative figures have been reclassified to conform to the current year’s presentation.
29
C E P M E D A N N U A L R E P O R T 2 010 – 2 011
30
C E P M E D A N N U A L R E P O R T 2 010 – 2 011
Corporate information
For further information on CEPMED, we invite you to consult our website at www.cepmed.com
Please contact us by telephone or email to discuss how CEPMED can help your organization bring personalized medicine technologies,
diagnostics and drug candidates to market and maximize their impact on patient care and the Canadian healthcare system.
Head Office
CEPMED
Centre of Excellence in Personalized Medicine
5000 Bélanger East, S-2090
Montreal, Quebec H1T 1C8
Tel.:
514-670-7660
Email: [email protected]
Web: www.CEPMED.com
For further information on personalized medicine, we invite you to consult the following websites:
www.personalizedmedicinecoalition.org
www.systemsbiology.org/intro_to_isb_and_systems_biology/Predictive_Preventive_Personalized_and_Participatory
http://p4mi.org
http://www.dnadirect.com/web
http://www.givehealthahand.org/share
http://www.geneticalliance.org
http://www.medcan.com
31
C E P M E D A N N U A L R E P O R T 2 010 – 2 011
Warfarin is a commonly prescribed and effective
blood thinner with known side effects dangerous
to some people. A recent study offered patients
the option of having genetic testing to determine
how they would respond to warfarin, and 82%
opted for the test and shared their genetic
information with their doctors. This group
showed a 30% reduction in hospitalizations over the
next six months as compared to a group
who had not received the genetic testing.
Better medicine is in our genes
C e nt r e of E xc e ll e nc e i n P e r so na l i z e d M e di c i n e
ANNUAL RE P ORT 2 0 1 0 – 2 0 1 1
5000 BÉ LANGER EAST, SUITE 20 9 0 , MONTREAL, Q UE B EC, H 1 T 1 C 8
T: 514 670 7660
INFO @ CE P MED .COM
WWW.CE P MED .COM