While the final chapter of the saga isn?t written yet, it looks like there won?t be a happy ending for the Northern Centre for Biotechnology and Clinical Research (NEUREKA).
Plagued by financial troubles, the beleaguered medical-research company recently laid off its staff, despite being given a $450,000 cash infusion a couple of months ago.
In September, acting chief executive officer Jim Skinner made an appeal to the Greater Sudbury Development Corporation for $150,000 in funding, in the form of a repayable loan. By this time NEUREKA had already secured $150,000 from FedNor and $150,000 from the Northern Ontario Heritage Fund.
According to Skinner, the money was to be used to bridge the salaries of employees over a four-month period, while NEUREKA tried to gets its financial house in order.
By this time, the decision has already been made to scrap the biotechnology division, which had been touted as the ?golden child? of the organization, and focus exclusively on clinical research.
Hermann Falter, chair of the NEUREKA board of directors, confirmed the organization is indeed in serious trouble. Government funding sources have dried up, mainly because of a vote of non-confidence in NEUREKA?s latest business plan.
?There are some steps the board has to take in the next few days, but it doesn?t look good,? Falter said. ?The options are very limited at this moment.?
He explained one of the major problems from the get-go was NEUREKA didn?t secure any long-term funding sources. While the company received $7 million in combined funding from the three levels of government since it opened, it needed a big pot of cash to subsidize its research and clinical trials over a very long period of time.
While acknowledging it?s not the same thing, Falter drew a comparison between NEUREKA?s projects and the time needed to develop a new drug,
which can take around 15 to 20 years.
?That kind of funding is difficult to come by,? he said.
Ideally a business can secure funding and start generating profit within a short time frame, but that?s not how NEUREKA works. It?s a whole different ballgame, Falter said.
Drawing another analogy, Falter said it?s like building an $8 million road, but not maintaining it once it's completed - eventually the road falls apart.
He is especially upset with rumours and allegations that NEUREKA was financially mismanaged or that staff or board members might have misappropriated money.
Falter said the organization?s financial records were opened to the government agencies that provided funding and every cent that was spent was accounted for by NEUREKA.