The new frontier: Saskatoon company doing leading edge work in medical science

June 6, 2008

Release Date: June 6, 2008

Murray Lyons, SP Business Editor
Published: Friday, June 06, 2008

If you were to poll insiders within Saskatoon’s biotech cluster at Innovation Place and ask them what life sciences company is one to watch, the name Phenomenome Discoveries Inc. will surely be on the list. Numbers alone suggest why.

Company executives aren’t going to reveal their firm’s budget for this year. This is, after all, a private company. But you can figure it out roughly once you see the level of capital investment in the laboratories, including a mass spectrometer that cost the company more than a million dollars in its formative years. You can also triangulate the approximate annual budget when you know that Phenomenome has grown within this decade to 50 employees, most of whom have advanced science degrees.

It is a company already well known to “Big Pharma” for some of its leading edge work in identifying metabolic markers in diseases such as colorectal cancer and Alzheimer’s. It now has a new drug development division that is looking at finding molecular compounds that will address those metabolic deficiencies in hopes of an effective treatment method.


Talk to co-founders Dayan Goodenowe and John Hyshka and they are not going to be caught overhyping their company’s accomplishments so far. Over and over in the course of a 90-minute interview, they keep repeating they’re “just Saskatchewan farm boys.”

Even one of their key young executives, Shawn Ritchie, director of their discovery research team, likes to repeat the company line. Forget about his PhD in biochemistry, Ritchie, too, points out he grew up on a farm in Saskatchewan.

Not to be left out, the head of the new drug discoveries unit, Paul Wood, who was Goodenowe’s former thesis adviser in Chicago and was lured to Saskatoon in the past year, can’t help mentioning he grew up on a farm in Ontario.

Hyshka, the CFO who quietly works in the background wooing visiting Swiss drug company executives as he did on a recent Saturday night at a Broadway restaurant, is certainly not afraid to engage in blue sky thinking.

The interest in what Phenomenome is doing could lead to more research contracts and alliances with the big pharmaceuticals for early-stage clinical work on some of the compounds being researched. Hyshka says all of this can occur in Saskatoon, a city well-suited to do drug company R&D.

“We could have as many as 100 to 300 people based in Saskatoon,” he said. “In 15 to 20 years, we could have 1,000 people or more if our business plan occurs the way we think it could.”

But Hyshka says they have not grown to where they are by letting Phenomenome get ahead of current reality.

“Being conservative farm boys, you grow with your cash flow and opportunities. The key is that we know we’re going to be growing,” he said. “The infrastructure we require is in the diagnostic arena, the drug arena and research monitoring area.”

Is all this farm background talk just self-effacing spin from a group of people who are considered leading edge in the science of metabolomics, a branch of medical science that could offer major breakthroughs in diagnosing and treating some of humankind’s most troublesome diseases, including colorectal cancer and Alzheimer’s disease?


At the end of a 90-minute discussion around the board table, a telling anecdote emerges. The farm boy talk makes sense. It turns out that the vacuum cart within the highly specialized and expensive FTICR mass spectrometer tool, used by Phenomenome scientists to track metabolic markers, ended up breaking prematurely in its first months of operation. It was crucial because the company had contract research it needed to get done.

So what did these folks do? The same thing that any farm boy faced with a breakdown inside a combine at harvest time would do. They took it apart and fixed it themselves even though the machine — think of it as an MRI that can track metabolites in molecules — cost the equivalent of about six farm combines.

“I bet every lab at the university with a mass spectrometer has a service contract from the manufacturer,” Wood said, chuckling. “When ours breaks down, we just fix it ourselves.”

How did it come about that an emerging life sciences company such as Phenomenome started and is still growing in Saskatoon?

Goodenowe credits former Ag West Bio Inc. president Peter McCann with starting the process. That eventually put Goodenowe together with Hyshka, a one-time economic development guy who left SREDA in the late 1990s to learn how the biotech industry was financed from the inside when he joined Performance Plants, which also has a presence at Innovation Place.

Speaking from his retirement home in Ontario, Peter McCann says he is not surprised at the rapid growth of Phenomenome. He says he saw the potential when he first heard Goodenowe speak at a biotech conference in the U.S.

“I was very impressed with what he was talking about. After he made the presentation, I went up to him and said, ‘Look, we’re from Saskatoon, we’ve got a little bit of money and we could help you get started if you’re interested in forming a company.’ ”

Both Hyshka and Goodenowe learned from the mistakes made by other biotech companies which went the route of becoming public companies far before they were ready. Instead, Phenomenome was designed to get contract revenue right from the start with large, multinational agribusiness companies paying to find unique metabolic biomarkers and apply the infomatics model that Goodenowe had developed.

Even today, 30 per cent of the lab time on the mass spectrometer is devoted to contract research.

Despite national and international attention these days, Hyshka says local support was critical to the company in the beginning. Several Saskatoon “angel investors” came on board.

“I’d love to disclose their names, but they probably don’t want me to because then everyone with a business idea will be knocking on their door,” Hyshka said, laughing. “We had local investors who really believed in what we were doing.”

More recently, major investment placements from Golden Opportunities Fund and Victoria Park Capital in Regina, plus national private equity funds, Tancho Investments and Dynex Capital, have come on board.

“When Dayan and I started this business, we did not want to be dependent on venture capital because private equity is very important at all different levels. We always believed contract research was important to our company,” Hyshka said. “We started doing contract for multinational agriculture, some of the most recognizable companies in Japan, the U.S. and Europe.”

The largest scientific team at Phenomenome is the one led by Ritchie, a University of Saskatchewan grad who did PhD thesis work at the Saskatoon Cancer Centre, then doing post-doctorate work at Phenomenome. His team is devoted to the discovery side, trying to find those unique markers expressed by the metabolites in the body that might make one person susceptible to a disease and not another.

The new drug discovery team, led by Wood, is looking at what molecular compounds might be developed to address the lack of metabolic compounds in people who get those diseases.

Goodenowe points out that Wood arrived in Saskatoon with huge credentials in neurological research, as a writer of textbooks, and a track record with both private and public companies in the U.S. pharmaceutical industry.

“At the appropriate time, we’re going to find partners to do various stages of clinical (drug) trials,” Hyshka said. “We’ll try to hold onto it as long as we can because you get more value the further along you validate the compound.”

That’s the business side of things where the people at Phenomenome believe the sky is the limit for their metabolomics technology.

But Goodenowe points out the public policy impact will be huge. That’s where the company hopes to complete partnerships with the provincial health agency in Saskatchewan and other big public health delivery agencies such as the Calgary Health Authority.

“True success in colon cancer or Alzheimer’s is when you actually put a dent in the population,” Goodenowe said. “If we understand the basis of these diseases . . . and if we are confident that a large portion of individuals suffering from these diseases are suffering because of a metabolic imbalance, then correcting that imbalance should have nothing but a positive impact.”