CanSino-McMaster deal may turn out to be 'case study of what not to do in partnerships with China': expert
McMaster University racing to beat former Chinese partner to make a COVID-19 booster
The federal government has trumpeted previous vaccine partnerships with a China-based company as one of the reasons why Canada was pinning its hopes on a COVID-19 vaccine candidate from China early in the pandemic.
But The Fifth Estate has reviewed those partnerships and found that a collaboration with McMaster University in Hamilton stalled years ago and never resulted in an approved vaccine anywhere in the world.
That collaboration has been of little benefit to the university or Canada. Instead, both the company, CanSino Biologics, and McMaster are now independently racing to develop similar COVID-19 booster vaccines.
Margaret McCuaig-Johnston, a former federal public servant who negotiated Canada-China science and technology agreements, said the CanSino-McMaster vaccine arrangement may turn out to be "a case study of what not to do in partnerships with China."
"The whole point is to work together, having the smartest people work together on the common good of fewer people dying," McCuaig-Johnston told The Fifth Estate. "But there's a valid reason for mistrust."
- For more on Canada's relationship with CanSino, watch "The Vaccine" on The Fifth Estate at 9 p.m. Thursday on CBC-TV and stream on CBC Gem
CanSino Biologics, based in Tianjin, China, was founded in 2009 by scientists who studied and worked in Canada. Over the years the company has maintained ties with Canadian researchers and used Canadian technology to develop its vaccines — including an Ebola vaccine and its single shot COVID vaccine.
McMaster, as well, inked a licensing deal for its tuberculosis vaccine with CanSino more than a decade ago. However, the partnership hasn't been active in years.
Yet Canada's National Research Council has cited that long-inactive CanSino-McMaster collaboration as a reason why the federal government went into business with CanSino for an injected COVID-19 vaccine early in the pandemic.
The federal government had hoped the CanSino COVID-19 vaccine could be made and manufactured in this country, but in May 2020, officials in China blocked it from coming to Canada for human trials.
After the deal fell apart, Prime Minister Justin Trudeau told reporters that the reason Canada partnered with CanSino was because of the "well-established partnership" between scientists in Canada and China "that has been effective in the past."
Allowed to keep researching
McMaster scientists developed a tuberculosis vaccine in 2011 and licensed its global marketing rights to CanSino.
McMaster hoped CanSino could in turn provide funding as well as manufacturing capabilities for trials, given that tuberculosis is still a problem in China.
McMaster and CanSino jointly conducted trials on monkeys at the Wuhan University School of Medicine, resulting in a study published in 2015.
But that's as far as the CanSino-McMaster relationship went. The two groups never did human trials together. CanSino went on to pursue other vaccines.
McMaster continued the research on its own and developed an innovative inhaled version of their TB vaccine. The researchers later conducted Phase 1 human trials in Canada with financial support from the federal government.
"CanSino really haven't done anything as regards our vaccine program," McMaster lead researcher Dr. Fiona Smaill told The Fifth Estate.
"They didn't provide us with any funding for our research or any ongoing relationship regarding the direction that our research program was headed in."
CanSino CEO Dr. Xuefeng Yu told The Fifth Estate that his company licensed exclusive "global rights" to McMaster's TB vaccine.
"So basically we actually allowed them to work, continue work on the research aspect of the TB vaccine," he said.
The company and the university appear to disagree on what exactly the licensing agreement covers.
WATCH | Dr. XuefengYu describes the arrangement with McMaster:
Smaill insists that the agreement only pertains to an earlier intramuscular version of the TB vaccine.
"I believe it is also important to re-emphasize our TB vaccine trials were not part of the agreement nor did we share data or receive funding from CanSino," Smaill wrote in an email. "In short, we have no relationship with CanSino beyond the TB licensing agreement."
Neither CanSino nor McMaster have released the full details of the contract.
WATCH | Dr. Fiona Smaill describes the contract details with CanSino:
However, CanSino quotes the contract in its stock filings and states that it licensed the tuberculosis vaccine and "relevant patent rights and technology information rights owned by McMaster."
The contract said CanSino would pay McMaster $105,000 in milestone payments, with the potential for royalties from sales.
Smaill confirmed that CanSino's summary of the contract was accurate. She added that it was for a maximum of 20 years, ending in 2031.
COVID-19 booster race
When the COVID-19 pandemic hit, McMaster pivoted, trying to develop a COVID-19 vaccine built on its TB technology that CanSino claims to have exclusive rights to market.
McMaster's COVID-19 vaccine research made headlines this past fall when Health Canada approved its COVID-19 vaccine candidate for Phase 1 human trials.
WATCH | McMaster trials an inhaled COVID-19 vaccine:
CanSino had the same idea for an inhaled COVID-19 vaccine and the company appears to be way ahead of McMaster. Its inhaled vaccine is now in Phase 2 and 3 human trials.
Last April, CNBC reported on CanSino's innovative inhaled COVID-19 vaccine and interviewed Yu.
"Actually we have run the TB human trials in Canada," Yu told the U.S. news network.
Yu was apparently referencing the McMaster trials, which the university says it conducted on its own with funding from the Canadian government.
Last fall, Yu told The Fifth Estate that CanSino's inhaled COVID-19 vaccine is based on "commercially available technology" and that he was not aware that McMaster has been developing its own inhaled vaccine.
"I haven't really had a conversation lately with McMaster University. I'm so busy with COVID-19 this last year," he said.
Deal offers 'low return,' expert warns
In a recent email, The Fifth Estate asked Yu to clarify if CanSino's COVID vaccine is based on McMaster's TB vaccine. The Fifth Estate also asked if the TB licensing agreement would affect McMaster's ability to market its COVID-19 vaccine.
However, CanSino has not responded.
McCuaig-Johnston, who has negotiated international science and technology deals, said depending on how strict this particular agreement is, McMaster may face trouble getting its vaccines to market.
She also said the deal gives "a pretty low, low return for McMaster," if indeed the TB vaccine forms the basis of CanSino's new inhaled COVID-19 vaccine.
"Why wasn't there negotiation for a higher value of dollar figure if there's an outcome?" McCuaig-Johnston said. "Because this could potentially be a billion-dollar product."
WATCH | The Fifth Estate's documentary, "The Vaccine":
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