Anchors Make the Picks and Shovels: What Basel, Copenhagen, Dublin and Tel Aviv can teach Canada about building a life sciences cluster that keeps it

If you've worked in a lab, you've used MilliporeSigma's products, even if you never thought about the name. Lab chemicals and reagents. Filtration and purification systems. Cell culture media. Bioprocessing equipment for making biologics. Contract manufacturing for therapies like viral vectors. It's the supplier layer that sits underneath every biotech and pharmaceutical company: the picks and shovels of the life sciences economy.

Look at how it was built. MilliporeSigma is the North American name for the life science business of Merck KGaA, the German science and technology company based in Darmstadt. Merck KGaA bought Millipore, a Massachusetts company, in 2010. Five years later, it paid US$17 billion for Sigma-Aldrich, a St. Louis company, and combined the two into a business that supplies more than 300,000 products.

Two American picks-and-shovels companies, each grown inside a US life sciences ecosystem, now sit inside a German anchor. That's not a story about Germany beating America. It's a story about how clusters work. 𝗧𝗵𝗲 𝘀𝘂𝗽𝗽𝗹𝗶𝗲𝗿 𝗹𝗮𝘆𝗲𝗿 𝗴𝗿𝗼𝘄𝘀 𝘂𝗽 𝗮𝗿𝗼𝘂𝗻𝗱 𝗮𝗻𝗰𝗵𝗼𝗿 𝗰𝗼𝗺𝗽𝗮𝗻𝗶𝗲𝘀, 𝗮𝗻𝗱 𝗮𝗻𝗰𝗵𝗼𝗿 𝗰𝗼𝗺𝗽𝗮𝗻𝗶𝗲𝘀 𝗯𝘂𝘆 𝗶𝘁. Where the anchor is headquartered decides where the value ends up.

That's the question this article is about. Canada has spent decades trying to build a life sciences cluster. The countries that succeeded didn't just attract companies. They kept anchors, and the anchors built everything else.

𝗛𝗼𝘄 𝗮 𝗰𝗹𝘂𝘀𝘁𝗲𝗿 𝗰𝗼𝗺𝗽𝗼𝘂𝗻𝗱𝘀

An anchor company is more than a big employer. Once it's headquartered somewhere, it sets off four loops that feed each other:

✅ 𝗗𝗲𝗺𝗮𝗻𝗱. Anchors buy reagents, equipment, testing, contract manufacturing and specialized services. That steady demand is what lets local suppliers exist and grow.

✅ 𝗧𝗮𝗹𝗲𝗻𝘁. Anchors train operators: people who know how to run a clinical program, scale a manufacturing process, or take a product through regulators. Those people eventually leave to start and lead the next companies.

✅ 𝗟𝗶𝗾𝘂𝗶𝗱𝗶𝘁𝘆. Anchors acquire smaller companies. When the buyer is local, founders and investors get their returns at home, and much of that money gets recycled into the next round of local startups.

✅ 𝗦𝗽𝗶𝗻𝗼𝘂𝘁𝘀. Anchors shed programs and people that become new companies. Basilea Pharmaceutica spun out of Roche in Basel in 2000 and is still headquartered there.

Each loop makes the others stronger. That's why clusters are so hard to start and so hard to stop. And it's why losing an anchor costs far more than the jobs inside it.

𝗧𝗵𝗿𝗲𝗲 𝗺𝗼𝗱𝗲𝗹𝘀, 𝘁𝗵𝗿𝗲𝗲 𝗼𝘂𝘁𝗰𝗼𝗺𝗲𝘀

Countries have taken very different paths to a life sciences economy. Three stand out, and Canada has tried versions of the first two.

𝟭. 𝗜𝗿𝗲𝗹𝗮𝗻𝗱: 𝗽𝗹𝗮𝗻𝘁𝘀 𝘄𝗶𝘁𝗵𝗼𝘂𝘁 𝗵𝗲𝗮𝗱𝗾𝘂𝗮𝗿𝘁𝗲𝗿𝘀

Ireland's results are staggering. In 2025, pharmaceutical exports reached €139 billion, 53% of all goods exports and 41% of modified gross national income. Around 75,000 people work in pharma manufacturing and related activities. The sector pays over 15% of Ireland's corporation tax.

It was built on foreign direct investment. Starting in the early 1960s, Ireland used aggressive tax incentives to attract multinationals, and it now hosts operations of the top 15 global pharma companies. But Ireland also has the highest share of value added from foreign-owned companies in the European Union, at more than 70%.

Ireland got the plants, the jobs and the tax base. It did not get the headquarters, the strategic decisions or the acquirers. Its own industry analysts now warn about concentration risk, with more than 60% of pharma exports going to a single market, the United States. 𝗧𝗵𝗮𝘁'𝘀 𝗮 𝗯𝗿𝗮𝗻𝗰𝗵 𝗲𝗰𝗼𝗻𝗼𝗺𝘆 𝗮𝘁 𝗻𝗮𝘁𝗶𝗼𝗻𝗮𝗹 𝘀𝗰𝗮𝗹𝗲. It's a better deal than having nothing, and it's the model Canada falls back on every time it celebrates a new foreign-owned manufacturing plant.

𝟮. 𝗜𝘀𝗿𝗮𝗲𝗹: 𝗰𝗮𝗽𝗶𝘁𝗮𝗹 𝘄𝗶𝘁𝗵𝗼𝘂𝘁 𝗮𝗻𝗰𝗵𝗼𝗿𝘀

Israel solved a different problem. In the early 1990s, it had strong university and defence research but almost no venture capital. In 1993, the government launched Yozma with US$100 million. Yozma invested up to 40% of each new venture fund, matched by at least 60% from private investors, often foreign firms. The private partners had the option to buy out the government's stake after five years at cost plus interest. Most of them did.

It worked spectacularly. Israel's annual venture capital investment rose nearly 60-fold between 1991 and 2000, from US$58 million to US$3.3 billion, and the industry was almost fully private by 2000.

But a capital program doesn't build anchors on its own. Over time, Israel became a net seller of companies: a world-class startup engine whose best companies were often acquired by foreign buyers. 𝗖𝗮𝗽𝗶𝘁𝗮𝗹 𝘄𝗶𝘁𝗵𝗼𝘂𝘁 𝗮𝗻𝗰𝗵𝗼𝗿𝘀 𝗯𝘂𝗶𝗹𝗱𝘀 𝗮 𝗳𝗮𝗿𝗺 𝘁𝗲𝗮𝗺. Canada should recognize that pattern. It's the one we live with.

𝟯. 𝗦𝘄𝗶𝘁𝘇𝗲𝗿𝗹𝗮𝗻𝗱 𝗮𝗻𝗱 𝗗𝗲𝗻𝗺𝗮𝗿𝗸: 𝗮𝗻𝗰𝗵𝗼𝗿𝘀 𝘁𝗵𝗮𝘁 𝘀𝘁𝗮𝘆𝗲𝗱 𝗵𝗼𝗺𝗲

Basel's cluster is more than a century old. Roche started manufacturing there in 1896. Novartis was formed in 1996 from two Basel companies whose roots go back to the 1850s. Lonza, one of the world's largest contract development and manufacturing organizations, is headquartered there too. Around 800 life sciences companies now operate in the Basel area, and by one measure, Basel has more than twice Boston's density of life sciences organizations per capita.

The head of Basel's investment promotion agency calls it a corporate cluster that turned into an ecosystem. The anchors came first. The suppliers, spinouts and startups grew around them.

Denmark shows how an anchor can stay home while still raising global capital. Novo Nordisk is publicly traded and widely held. But the Novo Nordisk Foundation, through its investment arm Novo Holdings, holds about 28% of the shares and controls about 77% of the votes through a class of shares that has never traded. The foundation is obligated to maintain that control. And Novo Holdings also invests in early-stage life sciences companies, so the anchor's owner doubles as a major investor in the next generation.

The lesson isn't that Canada should copy Danish foundations or Swiss family control. It's that 𝗰𝗼𝗻𝘁𝗿𝗼𝗹 𝗮𝗻𝗱 𝗰𝗮𝗽𝗶𝘁𝗮𝗹 𝗮𝗿𝗲 𝘀𝗲𝗽𝗮𝗿𝗮𝘁𝗲 𝗾𝘂𝗲𝘀𝘁𝗶𝗼𝗻𝘀. The anchors that stayed home all raised global money. They just never handed over the decision about where the company lives.

𝗖𝗮𝗻𝗮𝗱𝗮'𝘀 𝗰𝗵𝗮𝗽𝘁𝗲𝗿: 𝗼𝗻𝗲 𝗮𝗻𝗰𝗵𝗼𝗿 𝗹𝗼𝘀𝘁, 𝗼𝗻𝗲 𝗮𝗻𝗰𝗵𝗼𝗿 𝗸𝗲𝗽𝘁

Canada had an anchor once. Connaught Laboratories was founded at the University of Toronto in 1914. It manufactured insulin after its discovery in Toronto, produced much of the polio vaccine used in the Salk trials, and supplied vaccines to Canadians close to cost for decades. In 1972, the University of Toronto sold it to the Canada Development Corporation, a federal body created to keep Canadian companies under Canadian control. By 1986, it had been privatized. In 1989, it went to France's Institut Mérieux, and after a chain of mergers, it's now part of Sanofi.

Some economists argue that Connaught's sale was inevitable as the vaccine industry consolidated. That debate is worth having. But whatever you think of the decision, the outcome is clear: the anchor still operates in Toronto, but its strategic decisions, its acquisitions and its supplier relationships now belong to a company headquartered in Paris.

Canada also has proof that the opposite path works. In 1993, Allen Eaves, a UBC hematologist who had co-founded the Terry Fox Laboratory, remortgaged his house, took a government loan, and launched STEMCELL Technologies to sell the cell culture tools his own lab had developed. He was determined to keep the inventions in Canada. Today STEMCELL is Canada's largest biotech company, privately held, supplying more than 25,000 customers in 100 countries from Vancouver and Burnaby. It is, quite literally, a Canadian picks-and-shovels anchor, and it has helped turn Vancouver into a life sciences hub.

There's a lesson in how STEMCELL kept control. Tools companies can earn revenue early, so it could grow on its own profits instead of selling equity. A drug developer facing a decade of trials doesn't have that option. Which brings us to the hardest question in this whole debate.

𝗦𝗵𝗼𝘂𝗹𝗱 𝗖𝗮𝗻𝗮𝗱𝗮 𝗹𝗼𝗰𝗸 𝗱𝗼𝘄𝗻 𝗲𝗮𝗿𝗹𝘆-𝘀𝘁𝗮𝗴𝗲 𝗜𝗣?

It's tempting to say yes. If outside capital is how ownership leaves Canada, why not keep it out as long as possible?

Because the evidence points the other way. In 2025, Massachusetts biopharma companies raised about 11 times more venture capital than Canada's entire life sciences sector, with average rounds about seven times larger. Canadian companies are already starved for capital. Locking out outside money at the incubator stage would starve them further, and a slow company loses the race long before anyone gets the chance to buy it.

The risk isn't foreign money. 𝗧𝗵𝗲 𝗿𝗶𝘀𝗸 𝗶𝘀 𝗳𝗼𝗿𝗲𝗶𝗴𝗻 𝗰𝗼𝗻𝘁𝗿𝗼𝗹 𝗮𝘁 𝘁𝗵𝗲 𝗺𝗼𝗺𝗲𝗻𝘁 𝘁𝗵𝗲 𝗰𝗼𝗺𝗽𝗮𝗻𝘆 𝗱𝗲𝗰𝗶𝗱𝗲𝘀 𝘄𝗵𝗲𝗿𝗲 𝘁𝗼 𝘀𝗰𝗮𝗹𝗲. So the goal should be to protect the company's ability to stay, not to keep its IP in isolation. Canada already has the building blocks:

✅ 𝗠𝗮𝘁𝗰𝗵, 𝘁𝗵𝗲𝗻 𝗹𝗲𝘁 𝘁𝗵𝗲 𝗽𝘂𝗯𝗹𝗶𝗰 𝗽𝗮𝗿𝘁𝗻𝗲𝗿 𝗲𝘅𝗶𝘁. Yozma-style funds put public money alongside private money, with a buyout option that gives the government a clean exit and investors the upside. Public seed capital can be bolstered by outside capital without the public partner holding on forever.

✅ 𝗣𝘂𝘁 𝗰𝗼𝗻𝗱𝗶𝘁𝗶𝗼𝗻𝘀 𝗼𝗻 𝗽𝘂𝗯𝗹𝗶𝗰 𝗺𝗼𝗻𝗲𝘆, 𝗻𝗼𝘁 𝗯𝗮𝗻𝘀 𝗼𝗻 𝗽𝗿𝗶𝘃𝗮𝘁𝗲 𝗺𝗼𝗻𝗲𝘆. Headquarters commitments and clawbacks belong on public dollars. If a company takes public capital and moves its leadership abroad within a set period, the public share comes back.

✅ 𝗞𝗲𝗲𝗽 𝗖𝗮𝗻𝗮𝗱𝗶𝗮𝗻 𝗰𝗮𝗽𝗶𝘁𝗮𝗹 𝗶𝗻 𝗲𝘃𝗲𝗿𝘆 𝗿𝗼𝘂𝗻𝗱. Canadian co-investment with the right to participate in follow-on rounds keeps a Canadian voice at the table when the scale-up decision gets made.

✅ 𝗠𝗮𝗸𝗲 𝗿𝗼𝗼𝗺 𝗳𝗼𝗿 𝗰𝗼𝗻𝘁𝗿𝗼𝗹 𝘀𝘁𝗿𝘂𝗰𝘁𝘂𝗿𝗲𝘀. Novo Nordisk shows that a company can be publicly listed, widely held and globally financed while control stays with a long-term owner at home. Canadian policy should make those structures easier to use, not harder.

✅ 𝗕𝘂𝗶𝗹𝗱 𝗱𝗼𝗺𝗲𝘀𝘁𝗶𝗰 𝗮𝗰𝗾𝘂𝗶𝗿𝗲𝗿𝘀. This is the piece that closes the loop. When the buyer is a Canadian anchor, an exit doesn't mean an export. The founders get liquidity, the company stays, and the money gets recycled into the next startup.

𝗪𝗵𝗮𝘁 𝘁𝗵𝗶𝘀 𝗺𝗲𝗮𝗻𝘀 𝗳𝗼𝗿 𝗖𝗮𝗻𝗮𝗱𝗮

Canada doesn't need to choose between foreign investment and Canadian ownership. Ireland shows what happens when you take the investment and give up the headquarters. Israel shows what happens when you build the capital and let the anchors go. Basel and Copenhagen show what happens when you do both: welcome global money, and keep the decisions at home.

The supplier layer, the trained operators, the local acquirers and the spinouts all follow the anchor. MilliporeSigma exists because a German anchor went shopping for the best picks-and-shovels companies it could find. The question for Canada is whether our next STEMCELL, and our next Connaught, ends up being the buyer or the bought.

𝗘𝘃𝗲𝗿𝘆 𝗮𝗻𝗰𝗵𝗼𝗿 𝗖𝗮𝗻𝗮𝗱𝗮 𝗸𝗲𝗲𝗽𝘀 𝗯𝘂𝘆𝘀 𝗶𝘁𝘀 𝘀𝘂𝗽𝗽𝗹𝗶𝗲𝘀 𝗵𝗲𝗿𝗲, 𝘁𝗿𝗮𝗶𝗻𝘀 𝗶𝘁𝘀 𝗼𝗽𝗲𝗿𝗮𝘁𝗼𝗿𝘀 𝗵𝗲𝗿𝗲 𝗮𝗻𝗱 𝗯𝘂𝘆𝘀 𝗶𝘁𝘀 𝗻𝗲𝘅𝘁 𝗰𝗼𝗺𝗽𝗮𝗻𝘆 𝗵𝗲𝗿𝗲. 𝗘𝘃𝗲𝗿𝘆 𝗮𝗻𝗰𝗵𝗼𝗿 𝘄𝗲 𝘀𝗲𝗹𝗹 𝗱𝗼𝗲𝘀 𝗮𝗹𝗹 𝘁𝗵𝗿𝗲𝗲 𝘀𝗼𝗺𝗲𝘄𝗵𝗲𝗿𝗲 𝗲𝗹𝘀𝗲.

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𝗦𝗼𝘂𝗿𝗰𝗲𝘀

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