Ontario Bioscience Industry Organization » Reports

Ten Years After – Looking Back At A Biotech Boom

obio — Wed, 09 Jun 2010 19:15:49 +0000

Introduction
There have historically been overlapping biotech booms and IPO windows, the three most recent boom/windows being 1995-1996, 1999-2001 and 2003-2005. Each of these boom/windows was impacted by positive external market forces, with the last two benefiting from the dot-com bubble and the post-9/11 market bounce, respectively. The driving factors within biotech have been different for each boom/window: 1995-1996 was partially driven by investor demand for new stories; 1999-2001 was driven by the potential for new technologies; and 2003-2005 was partially driven by product approvals and successful companies. In this report, we look back at the 1999-2001 boom/window, the IPOs and their subsequent performance.

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The Burrill Report – Canadian Edition, April 2010

obio — Fri, 04 Jun 2010 13:17:33 +0000

Canada’s biotech stocks sizzled in the first quarter as they racked up impressive gains. The Burrill Canadian Biotech Index jumped 12 percent during the period. This is good news for the sector, which has languished for over three years. Low valuations have hampered the ability of public biotech companies to raise capital. The improving capital markets in Canada and the United States have helped bolster Toronto’s main stock index— the Toronto Stock Exchange’s S&P/TSX Composite Index—improving 3.5 percent during March and 2.5 percent for the quarter.

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ONTARIO’S LIFE SCIENCES COMMERCIALIZATION STRATEGY

obio — Mon, 03 May 2010 21:12:50 +0000

…But today our industry is being challenged by increased global competition
from established and emerging life sciences jurisdictions, as well as by
difficult economic conditions that include tight credit and market volatility.
To compete successfully in the global marketplace, we know that our industry
needs to continue to attract and nurture great scientific minds, increase
collaboration among all the players – academia, industry and government –
to accelerate the commercialization of research breakthroughs, and improve
financing for innovative companies, particularly at the early-stage.

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Q1 2010 Canadian Healthcare Review

obio — Wed, 28 Apr 2010 11:20:03 +0000

Financing
Public Canadian healthcare companies completed equity and convertible debt financings during this quarter for total gross proceeds of $236.0 million (Appendix 1). The largest financing in the sector was the only financing in the Services group, $86.3 million by Extendicare. The largest financing in the Therapeutics group was $34.5 million from a rights offering by Wex Pharmaceuticals, with 97.6% of the shares being issued to its largest shareholder. Excluding these two financings, the rest of the sector raised $115.2 million. Other financing vehicles also provided some current and future funds for companies. Merck advanced US$25 million to Cardiome under a secured, interest-bearing credit facility which is a component of their partnership for vernakalant. Allon Therapeutics and Resverlogix established Standby Equity Distribution Agreements (SEDAs) for $10 million and $25 million, respectively, but have not yet made any draw downs under these agreements. Bioniche Life Sciences received US$8 million in milestone payments under its partnership with Endo.

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Discussion Notes: Quebec/Ontario Bioscience CEO Dinner, April 6, 2010

obio — Mon, 26 Apr 2010 15:11:31 +0000

What Quebec/Ontario Government funded programs are most effective?

First and foremost, as entrepreneurs our duty is to create shareholder wealth with products and services the marketplace demands. This cannot be substituted with or diverted by any government funding program.
Quebec: Tax holidays for key employees; tax exemption for new products developed in Quebec
- Quebec’s SR&ED tax credit regime is a differentiator, especially when combined with the Investment Quebec loan guarantee program
- Ontario: Emerging Technology Fund has the potential to be very helpful if bioscience companies could access it.
- Federal: Amendment of Section 116 tax code, should increase access to capital by non-residents and in particular venture capital and private equity funds. This will help put Canadian companies on an even footing to compete globally

As a Quebec/Ontario CEO what are the strengths of your sector?

In Quebec the creation of Teralys Capital is seen as beneficial as long as the venture captil funds that it finances invest in the life science sector
In Ontario the formation of OBIO to represent the CEOs of the industry helps move the agenda of the bioscience industry forward so companies can get beyond life-support

What advantages do other jurisdictions (i.e. USA) have?

The US government procurement policy is very nurturing to small business and innovative early-stage businesses. The SBIR program is a massive engine that fuels hundreds of life science start-ups per year.
US companies do not go public as early and are better capitalized when they do
Germany has invested heavily for the last decade in the biotechnology and has a strong industry with over 400 health-related biotech companies

What opportunities does the Quebec-Ontario biocorridor represent?

Encourage mergers and acquisitions to leverage strengths and build stronger companies
As a biocluster Quebec and Ontario become one of the largest clusters in North America and increase their marketing strength to outside investors
Increase understanding in both provinces of the amount of money and time required to take a product to commercialization
Expand the value proposition that bioscience offers to the economy of both provinces and to Canada

What single action can we take to build the Quebec-Ontario biocluster?

Ontario spends $46B on healthcare – challenge is making the spend more effective
Ontario, as both a healthcare payer and provider should be:
- A funder of life science companies that can help improve the effectiveness and efficiency of our $46B healthcare spend
- A lead customer and early adopter of these products and services

Provide more grant money to life science companies
Make public companies eligible for SR&ED
Flow through share programs used successfully in mining represent a model for a program that could be both feasible from a public funds perspective and compelling to industry
Flow through shares to biotech companies
Re-engage Canadian investors in this sector
More events like this evening’s dinner to encourage discussion and create natural opportunities for mentoring.

OBIO Releases Biotechnology Industry Consultation Report

admin — Wed, 20 Jan 2010 20:26:34 +0000

OBIO Biotechnology Industry Consultation Report
November 2009

(Download PDF / View Online)

Executive Summary
The Ontario government has recognized the importance of the emerging knowledge economy to the province’s future prosperity. The biotechnology industry is an important part of a knowledge economy. The confluence of external and internal factors has converged to create an unprecedented crisis in this sector. The combination of the recession, the high cost of research and development, decreased liquidity and absence of equity investment threatens the survival of many of our nascent companies. Many of our companies’ very survival are being challenged, specifically due to their inability to raise capital and maintain the necessary working capital to continue operations¹. A number of them have ceased operations due to the crisis.

Ontario’s biotechnology SMEs, of which 68% are privately owned, develop innovative drug therapeutics, diagnostics and medical devices. The Ontario government has shown commitment to the biotechnology sector, as part of their support for emerging technology industries. However, regulatory requirements and the lead-time between discovery and commercial revenue create unique challenges for SMEs in the bioscience sector, which are not always recognized. Both private and public biotechnology SMEs have come together to form the Ontario Bioscience Industry Organization (OBIO) with the mandate to provide input to the provincial government around actions designed to ensure the long-term commercial success of our industry, and the associated growth in R&D sector jobs and financial health.

This report provides five specific recommendations (see below) to government. The five recommendations focus on changes to existing provincial programs, all of which we believe could be modified within the next fiscal year, and target short-term relief for the Ontario industry. They are based on direct feedback from CEOs of Ontario biotechnology firms in a province-wide consultative process. The process was completed in two stages. Initially, 6 province-wide working groups enumerated CEOs’ concerns and suggestions. The second stage consisted of an online consultation and voting process involving CEOs in the industry. Finally, the report identifies several longer-term opportunities for strengthening the partnership between the Ontario biotechnology industry and government.

Specific Industry Generated Recommendations
1. Increase the 10% refundable Ontario Innovation Tax Credit (OITC) to be more in line with Quebec.
2. Establish a mechanism to monetize Tax Credits quickly, providing short-term cash flow
3. Modify the eligibility requirements of the OETF to allow for smaller funding rounds.
4. Establish a fund similar to OETF for small public companies unable to raise capital.
5. Change the eligibility requirements for BIP to:
a. Remove needs for current market activity
b. Expand the types of companies who can apply
c. Reduce the level of expenditure required

Click here to view the full report online, or click here to download the PDF version.

¹ http://www.biotech.ca/uploads/pwc%20survey/lifescienceforecastfinal.pdf

Review of the Canadian Healthcare Sector in 2009 by Equicom

admin — Wed, 20 Jan 2010 14:40:07 +0000

Public Canadian healthcare companies operate in a complex, challenging and constantly changing global environment. In 2009, some companies celebrated success, most focused on survival and a few did not make it. In this review, we will look at some of the environmental changes and company-specific events of 2009 which characterize this challenging year and will impact the future of this sector.The sector raised a total of about $1.28 billion from equity and convertible debt financings in 2009.

Excluding the US$350 million convertible debt financing by Biovail and the US$215 million equity financing by SXC Health Solutions, the rest of the sector raised $654 million, which is substantially better than the 2008 total but is still far below the annual average of almost $1.05 billion for 2005 through 2007.

Click here to download the PDF of the full article. Click here to view online.

The Canadian Blueprint: Beyond Moose and Mountains — How we can build the world’s leading bio-based economy

obio — Wed, 20 Jan 2010 07:36:46 +0000

Biotechnology is creating products and processes that improve our quality of life. Just as importantly,
biotechnology is also creating high-quality jobs for Canadians in every part of the country; rewarding,
knowledge economy jobs.

No matter where we live, we all have a stake in the bio-based economy.

The “Canadian Blueprint” is a strategy that will enable us to take full advantage of all the opportunities
biotechnology has to offer, provided all stakeholders do what is required of them.

This document is a call to action. The Canadian Blueprint is vitally important because, the fact is,
biotechnology is critical to Canada’s future prosperity and economic security.

Click here to download the PDF. Click here to view online.