Private Canadian Research Laboratory Sold to French

Connaught Biosciences Inc., one of Canada’s most respected private laboratories and its leading producer of vaccines, has been taken over by a French company. The action was criticized by many Canadian scientists and politicians.

The federal Cabinet cleared the way for Connaught’s purchase by France’s Institut Merieux after Investment Canada, an agency of the Canadian government, said the change would provide “net benefits” to Canada.

Investment Canada has the power to block foreign purchases of Canadian businesses worth more than $25-million (Canadian).

The University of Toronto, owner of Connaught until 1972, began legal action last July to block the sale. However, the university dropped its objections in November when Merieux agreed to finance “leading-edge” research worth $15-million at Toronto and other Canadian universities over the next decade.

Merieux also has agreed to spend $160-million on research and development in Canada by 1994, including $39-million on basic research; to build a biotechnology center in Toronto; and to retain Connaught’s existing Canadian headquarters, facilities, and employment levels.

In Quebec, meanwhile, the provincial government has fired the board of directors of the University of Quebec’s Armand Frappier Institute for refusing to complete the previously negotiated sale of the institute’s vaccine-production division to a Quebec company.

The institute had put the money-losing division on the market a year ago.

Ironically, it was a proposal to sell the division to Connaught when the Toronto laboratory was still Canadian-owned that prompted the Quebec government to help negotiate a deal to retain control of the Armand Frappier division in Quebec.