The Cross-Border Biotech Blog

Biotechnology, Health and Business in Canada, the United States and Worldwide

Cross-Border Biotech Blog Relaunch

Bloom Burton & Co. is happy to announce that we will be picking up the torch of the Cross-Border Biotech Blog. The new, reinvigorated blog will feature commentary, data, analysis, case studies and interviews from well-known international healthcare executives and investors, as well as from members of the Bloom Burton team.

You can read the blog at its new location here. E-mail subscribers can renew their subscription using the link in the sidebar of the blog’s main page.

Monday Deal Review: March 31, 2014

Welcome to your Monday Biotech Deal Review for March 31, 2014!

Hit the break to see our summary of the past weeks’ biotech news.

 

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Monday Deal Review: March 17, 2014

  Welcome to your Monday Biotech Deal Review for March 17, 2014, and happy St. Patrick’s day to the Irish (or Irish-for-a-day) among us!

This past week saw Patheon complete their plan of arrangement with JLL/Delta Patheon Holdings, wherein JLL/Delta acquired all outstanding shares of Patheon for US$9.32 cash a share. The 2 entities have now been amalgamated and will operate under Patheon Inc., with DSM Pharmaceutical Products also now combined with Patheon.

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Monday Deal Review: March 10, 2014

  Welcome to your Monday Biotech Deal Review for March 10, 2014!

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Monday Deal Review: February 24, 2014

  Welcome to your Monday Biotech Deal Review for February 24, 2014!

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Monday Deal Review: February 10, 2014

  Welcome to your Monday Biotech Deal Review for February 10, 2014! The big news this week was Valeant’s proposed acquisition of another skin care innovator, PreCision Dermatology, for $475 million. Hit the break for more details on this as well as the rest of the week’s major biotech news.

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Monday Deal Review: February 3, 2014

  Welcome to your Monday Biotech Deal Review for February 03, 2014!

This week saw Jamieson Labs complete the sale of their business to CCMP Capital Advisors, LLC.

In the commercial space, Sirona has executed licensing agreements with Obagi Medical Products and Wanbang Biopharmaceuticals in respect of  its patented skin lightening technology and its anti-diabetic SGLT2 inhibitor, respectively.   Regarding the Obagi agreement, Sirona will transfer its patented skin lightening technology and know-how to Obagi. Obagi will be responsible for the manufacturing, distribution and global sales of the final commercial products. Regarding the Wanbang license,  Sirona is transfering responsibility for all funding, clinical development, regulatory requirements, manufacturing, sales and marketing of its SGLT2 inhibitor in China for upfront and milestone payments of up to US$9.5M in addition to royalty payments.

For details and news on these deals, as well as the rest of the week’s major biotech news, hit the break.

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Monday Deal Review: January 27, 2014

  Welcome to your Monday Biotech Deal Review for Janary 27, 2014! This week saw Valeant complete thier acquisition of Solta Medical, Inc. for USD$250 million. Solta Medical provides treatment technologies for aesthetic care options at the consumer and physician level.  Valeant has also announced a share repurchase program to make purchases of up to $1.5 billion of its convertible notes, senior notes, common shares and/or other debt or shares that may be issued. In other news, Atrium Innovations has obtained shareholder and debentureholder approval for a plan or arrangement allowing for the acquisition of the company by corporations backed by the Permira funds and the acquisition by the company of all of its outstanding convertible debentures.

For details and news on these deals, as well as the rest of the week’s major biotech news, hit the break.

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Monday Deal Review: January 20, 2014

  Welcome to your Monday Biotech Deal Review for Janary 20, 2014! This week saw Paladin purchase Triton Pharma,  privately-held, Canadian specialty pharmaceutical company focused on acquiring and in-licensing specialty innovative products with expected sales of $4 million in 2014. This occurs as Paladin continues to be an acquisition target for Endo Health.

In the commercial space, Sirona and Cincennatti Children’s hospital have signed an agreement to develop an anti-aging cream and associated intellectual property incorporating the proprietary technologies of each organization. The resulting new anti-aging product will be patented with the goal of licensing the new technology to a global leader in the cosmetic and consumer packaged good marketplaces.

For details and news on these deals, as well as the rest of the week’s major biotech news, hit the break.

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Q4 2013 and Annual Share Price Performance for the Canadian Healthcare Sector: Strong and volatile performance for the smaller cap public companies (Part 2)

Wayne Schnarr - seriousIn this blog, I will focus on the Canadian public healthcare companies which started 2013 with share prices between $0.10 and $0.99 (53 companies). The results for the larger companies covered in Part 1 of this blog were strong. The results for the smaller cap companies were also strong – average annual share price increase was 53% – but with more volatility.

Three companies exited this group during 2013. Medicago was acquired by Mitsubishi Tanabe Pharma for $1.16 per share, an increase of 173% from the initial 2013 share price. Philip Morris Investments retained its 40% share in Medicago. MethylGene (now Mirati Therapeutics) and Sophiris Bio both delisted from the TSX after moving their operations to the U.S. Six companies will not be carried over to the 2014 list as their share prices were below $0.10 to close 2013. Two companies which started 2013 below $0.10 will move up one tier in 2014 and some new companies, such as Antibe Therapeutics, will also be added to the list.

Q4 Share Price Performance (50 companies)

  • Advancers outnumbered decliners by 31 to 19
    • Therapeutics: 13 to 6
    • Diagnostics & Devices: 9 to 6
    • Services: 3 to 2
    • Others: 6 to 5
  • Average and median Q4 share price changes were +15% and +9%, respectively, versus +27% and +20% in Q3
  • Average share price changes by subgroup
    • Therapeutics: +29% vs. +36% in Q3 (17 companies)
    • Diagnostics & Devices: +11% vs. +3% in Q3 (9 companies)
    • Services: +12% vs. +36% in Q3 (7 companies)
    • Others: -3% vs. +39% in Q3 (3 companies)
  • Thirteen companies had share price increases of 40% or more
  • Four companies had share price declines of more than 40%

2013 Annual Share Price Performance (51 companies)

  • Advancers outnumbered decliners by 28 to 23
    • Therapeutics: 13 to 7
    • Diagnostics & Devices: 7 to 8
    • Services: 3 to 2
    • Others: 5 t 6
  • Average share price increase was 53%
  • Average share price changes by subgroup
    • Therapeutics: +41%
    • Diagnostics & Devices: +14%
    • Services: +165%
    • Others: +68%
  • Eighteen companies had share price increases of 40% or more, with my personal perspective on the main reasons for the share price movement
    • Northstar Healthcare Inc. (+746%) –bounce off lows on reorganization and refinancing
    • Stellar Biotechnologies, Inc. (+571%) – bounce off lows on technology acquisition and financing
    • BioSyent Inc. (+363%) – increased sales and profitability
    • Cardiome Pharma Corp. (248%) – bounce on new commercial activity and some clinical data
    • ProMetic Life Sciences Inc. (226%) – increased revenues and purchase agreements
    • CRH Medical Corporation (+178%) – increased revenue and profitability
    • Medicago Inc. (+173%) – acquired by Mitsubishi Tanabe Pharma
    • Theralase Technologies Inc. (+138%) – closed financing
    • Spectral Diagnostics Inc. (+132%) – progress towards pivotal clinical data
    • QHR Technologies (+127%) – increased revenue and cash flow
    • Zecotek Photonics Inc. (+121%) – financing completed and new commercial orders
    • Vigil Health Solutions Inc. (+108%) – increased revenues
    • Lorus Therapeutics Inc. (+84%) – changes in management and product focus
    • Welichem Biotech Inc. (+78%) – using cash to repurchase shares (very illiquid stock)
    • Immunotec Inc. (+58%) – management change
    • Theratechnologies Inc. (+56%) – new commercial activity
    • China Health Labs & Diagnostics (+55%) – being privatized
    • Sirona Biochem Corp. (+45%) – financing and license agreements

Among these 18 companies, 6 reported better financial results, 4 had new commercial or licensing deals and 3 had changes in management and / or product focus. There were no cases in 2013 where late-stage clinical data was the major trigger.

  • Nine companies had  share price declines of more than 40%, with my personal perspective on the main reasons for the share price movement
    • Cardiocomm Solutions Inc. (-43%) – did not meet market expectations after commercial announcements in March
    • Nuva Pharmaceuticals Corp. (-45%) – change in management and business focus
    • VentriPoint Diagnostics Ltd. (-48%) – FDA did not approve 510(k) application
    • Centric Health Corp. (-49%) – results of cost containment and rationalization did not meet market expectations
    • iCo Therapeutics Inc. (-55%) – impatient investors waiting for Phase 2 data
    • Verisante (-56%) – product sales did not meet market expectations
    • DiagnoCure Inc. (-57%) – product sales did not meet market expectations
    • IBEX Technologies, Inc. (-62%) – forward guidance for reduced purchases by a major customer
    • Innovotech Inc. (-84%) – continuing losses and sustainability concerns

Among these 9 companies, the main trigger was a failure to meet market expectations for clinical progress, regulatory approvals or increased revenues.

Third Tier Performance

The third tier of companies started 2013 with share prices below $0.10 (27 companies). Of the companies still active at year end, 8 companies had 2013 share price increases of 40% or more, including 3 over 400%, and 6 companies had share price decreases of -40% or more. This list will substantially change in 2014 as:

  • 3 companies moved to the top tier;
  • 2 companies moved to the second tier;
  • 7 companies were dropped due to CCAA, acquisitions or cease trade orders; and
  • 6 companies moved from the second to the third tier.

Sector Summary

The positive share price performance in the sector is a relief. It may have been triggered partially by investors looking south at the resurgence of biotech IPOs, although some of those valuations were ridiculously high. It also included some bottom-fishing as many share prices bounced off 2012/2013 lows on low trading volumes, survival financings and minor events.

In looking at the Canadian companies with share price increases of 40% or more in 2013, the reasons were primarily financial, commercial and acquisitions. The biotech industry has historically looked for positive late-stage clinical data and regulatory approvals to invigorate investors. There were no cases in 2013 where late-stage clinical data was the major trigger.

Key sector questions for 2014 include:

  • What will keep up the momentum in the sector;
  • Are there more acquisition targets; and
  • Are there any upside surprises expected from late-stage clinical data or regulatory approvals?

[The opinions expressed herein are the author’s own and are not to be construed as investment advice. The author and his immediate family members may have long or short positions in the shares of some companies mentioned in or assessed during the preparation of this blog and may buy, sell or hold such securities at any time. Past share price performance may not be an indicator of future share price performance. This blog and its contents do not consider the investment objectives, financial situation or particular needs of any particular person. Investors should obtain professional advice based on their own individual circumstances before making an investment decision.]

Monday Deal Review: January 13, 2014

  Welcome to your Monday Biotech Deal Review for Janary 13, 2014! This week saw the closing of a number of financing transactions, as well as Sirona’s announcement of a private placement of up to $5.34 million in proceeds.  Aeterna Zentaris also announced pricing of their public offering, indicating that shares will be sold at US$1.20 per share, with proceeds up to US$12.2 million.

For details on these deals, as well as the rest of the week’s major biotech news, hit the break.

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Q4 2013 and Annual Share Price Performance for the Canadian Healthcare Sector: Another upbeat quarter for the larger cap public companies (Part 1)

Wayne Schnarr - seriousIn order to assess share price performance in 2013 among the Canadian public healthcare companies, I used an initial portfolio of 118 companies. The portfolio was split into three parts according to the closing share price on December 31, 2012: $1.00 or more (38 companies); $0.10 to $0.99 (53 companies); and less than $0.10 (originally 27 companies).

In this blog, I am going to comment on the Q4 and annual performance of the first group of companies with share prices of $1.00 or more to start 2013. The quarterly share price performance was upbeat again and the annual performance was strong.

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Monday Deal Review: January 6, 2014

  Welcome to your Monday Biotech Deal Review for Janary 6, 2014! Happy New Year! Things in 2013 slowed considerably as we approached the holiday season, however January has gotten off to a good start.

Hit the break to see this week’s major biotech news, and thank you to Jennifer Ng of Norton Rose Fulbright Canada LLP for conbtributing to this week’s post.

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Monday Deal Review: December 16, 2013

  Welcome to your Monday Biotech Deal Review for December 16, 2013! This week saw Cangene announce thier acqusition by Emergent BioSolutions for CDN$236 million. Further, on the commercial side, Theratechnologies, Stellar Biotechnologies and NEOMED all made announcements in the collaboration space.

Hit the break to see this week’s major biotech news.

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Monday Deal Review: December 9, 2013

  Welcome to your Monday Biotech Deal Review for December 9, 2013!

Hit the break to see this week’s major biotech news.

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Monday Deal Review: December 2, 2013

  Welcome to your Monday Biotech Deal Review for December 2, 2013! Hit the break to see this week’s major biotech news.

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Monday Deal Review: November 25, 2013

  Welcome to your Monday Biotech Deal Review for November 25, 2013! This week saw Patheon enter into an agreement which will take the company private, once the necessary shareholder and court approval is obtained. Futher, Cardiome has closed its acquisition of Swiss-based Correvio in a cash and share deal. On the financing side of things, Aeterna Zentaris announced that it is seeking to raise US$13.7 million with its previosly announced public offering.

Hit the break the see the details on these deals, as well as the rest of the week’s major biotech news.

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Monday Deal Review: November 18, 2013

  Welcome to your Monday Biotech Deal Review for November 18, 2013! This week saw significant activity in the biotech space, so follow the link to see the full week’s worth of major biotech stories!

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Monday Deal Review: November 11, 2013

  Welcome to your Monday Biotech Deal Review for November 11, 2013! This week’s big story was the announcement that Paladin Labs has agreed to be acquired by NASDAQ-listed Endo Health Solutions for $1.7 billion. The deal will lead to existing Paladin shareholders recieving shares in a new holding company (holding both Endo and Paladin shares) and newly formed Canadian public company Knight Therepeutics.

There were many more notable deals this past week, so follow the link to see the full week’s worth of major biotech stories!

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Monday Deal Review: November 4, 2013

  Welcome to your Monday Biotech Deal Review for November 4, 2013! A number of financings have closed in the past week, with a few more placement being announced as well.  Prometric is continuing with its public offering, while OPMEDIC is continuing with its amalgamation which will take the company private.

Follow the link to see the full week’s worth of major biotech stories!

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Monday Deal Review: October 28, 2013

  Welcome to your Monday Biotech Deal Review for October 28, 2013! This week saw some activity in both the M&A and financing spaces, notably involving BELLUS Health, Concordia, Arch Biopartners, Novadaq and others.

Hit the break to catch up on the week’s major biotech news!

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Monday Deal Review: October 21, 2013

  Welcome to your Monday Biotech Deal Review for October 21, 2013! After a busy few weeks in September and October, the past week saw a slow in activity across the sector. Nonetheless, hit the break to get a rundown on this week’s major stories!

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Share Price Performance in Q3 2013 for the Canadian Healthcare Sector (Part 2): Extraordinarily positive results for the smaller cap public companies

Wayne Schnarr - serious

In this blog, I will focus on the Canadian public healthcare companies which started 2013 with share prices between $0.10 and $0.99 (53 companies). While the results for the larger companies covered in Part 1 of this blog were strong, the results for the smaller cap companies were even stronger. Some caution is needed as many of the share prices bounced off 2013 lows on low trading volumes and minor events.

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Monday Deal Review: October 14, 2013

  Welcome to your Monday Biotech Deal Review for October 14, 2013!

Of particular note this week is the innovative collaboration between Sirona Biochem and Bloom Burton & Co. The venture seeks to develop and commercialize new therapeutics in the areas of inflammation and infectious disease. Such an arrangement purports to take advantage of Sirona’s proprietary fluorination technology platform, and Bloom Burton’s knowledge of the market and expertise in commercialization, delivering to market products targeted towards rare or neglected inflammatory diseases and bacterial resistance. This model shows significant promise, so look to this space to see how the relationship progresses.

Hit the break to get the full scoop on the week’s major stories!

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Share Price Performance in Q3 2013 for the Canadian Healthcare Sector: An upbeat quarter for the larger cap public companies (Part 1)

Wayne Schnarr - seriousIn order to assess share price performance in 2013 among the Canadian public healthcare companies, I have used an initial portfolio of 118 companies. The portfolio has been split into three parts according to the closing share price on December 31, 2012: $1.00 or more (38 companies); $0.10 to $0.99 (53 companies); and less than $0.10 (originally 27 companies).

In this blog, I am going to comment on the Q3 and 9-month performance of the first group of companies with share prices of $1.00 or more to start 2013. Whereas there is usually little share price movement in the slow summer quarter, Q3 2013 was very upbeat and the performance in the first 9 months of 2013 is actually strong.

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Monday Deal Review: October 7, 2013

  Welcome to your Monday Biotech Deal Review for October 7, 2013! A busy week saw significant activity in both the financing and commercial agreement spaces.  Of note is MedMira recieving a $6.1 million equity investment.

Hit the break for the full rundown of the week’s major biotech news! And thanks again to Jennifer Ng of Norton Rose Fulbright for helping out with this week’s post.

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Monday Deal Review: September 30, 2013

  Welcome to your Monday Biotech Deal Review for September 30, 2013! There has been a lot of activity in the M&A and finanicngs space the last week.  Hit the break for the full rundown of the weeks’s major biotech news!

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Monday Deal Review: September 23, 2013

  Welcome to your Monday Biotech Deal Review for September 23, 2013! Now that we are in the full swing of September, the activity in the market has ramped up.

In terms of M&A, Axxess has purchased the assets of Revive Bioscience, including Revive’s product and IP portfolios, for an undisclosed amount. Easton has re-entered the drug market by purchasing rights in a female sexual arousal disorder drug. And MTPC has completed its acquisition of Medicago. Medicago’s shares are no longer listed as a result.

In terms of financing, IMRIS and Xylitol have both enetered into loan agreements. However, a number of other companies are also rasing capital through placements, including MedMira, Miraculins, and Bioniche .

Theres lots more to report, so hit the break to see the past weeks’ major biotech stories.

Once again, a big thank you to Jennifer Ng for her help in getting these stories to you.

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Some thoughts on Personalized Medicine

Wayne Schnarr - seriousA simple definition of personalized medicine is healthcare designed for each individual patient. I think it is a worthwhile long-term healthcare objective, with emphasis on long-term, because clinical data on the benefits (to both patients and health systems) of such approaches, along with the required array of diagnostic tools and treatments, is currently not available. Personalized medicine has achieved a substantial buzz level despite limited, slow progress to date. This blog contains some of my personal thoughts on defining personalized medicine and its path forward.

The first step in current medical practice is generally the diagnosis of the presence or absence of various medical conditions. The standard tools include family medical history, blood and urine analysis, ECG and basic medical imaging. The first step in personalized medicine will also be diagnosis but with an added focus on the relative risk for disease development using a more complex set of tools. One idea is that an enhanced medical profile, probably including a genomic / proteomic profile, will allow the assessment of an individual’s relative risk of developing a series of serious medical conditions. However, many questions remain around how this will be implemented and what the benefits would be:

  • Which serious medical conditions should be assessed in an enhanced medical profile?
  • For which serious medical conditions could a relative risk be assigned today based on an enhanced medical profile?
  • When will it be reasonably possible to assess relative risk for all serious medical conditions included in an enhanced medical profile? Are new diagnostic tests or technologies needed or just long term clinical data?
  • What is the cost of the initial profiling?
  • Will the profiling have to be repeated? If yes, at what cost?

The next step in medical practice is to treat the medical condition. There are serious medical conditions for which there are no cures and treatments have limited benefit. Will an enhanced medical profile provide any benefit for these patients? I believe that the answer is yes, since the patients, their families and the healthcare system can prepare for the care and treatment which these patients will need. In addition, there will be a profiled population available for research and clinical trials, involvement in which must still require the patient’s informed consent.

There are some serious medical conditions which can be prevented. The two major tools which are available now for disease prevention are vaccines and lifestyle adjustment.

  • Vaccines have been able to eradicate some very serious diseases (i.e. smallpox), substantially reduce the incidence of most childhood infectious diseases, and more recently impact the incidence of some adult medical conditions (hepatitis B and cervical cancer). However, development of novel vaccines is difficult – nothing yet for HIV and hepatitis C – and expensive. It does not currently make economic or clinical sense to personalize childhood vaccination programs – the universal programs work at reasonable costs. Adult vaccination programs are personalized taking into consideration the potential exposure based on type of work and travel.
  • Lifestyle adjustment – the worldwide healthcare system could potentially reallocate trillions of dollars spent on treating the results of only two lifestyle problems, obesity and smoking. These are conditions where the patient probably needs personalized human support during lifestyle adjustment more than they need personalized diagnostics and drugs. Healthcare systems are good at fast treatment with defined tools that produce immediate results – they are less effective with soft tools that take much longer to show any potential benefit.

There are many medical conditions for which most patients are adequately treated with the current basket of diagnostics and drugs. It would not make clinical or economic sense to do universal enhanced profiling for these medical conditions. It would probably make sense to do enhanced profiling for those patients where current therapies do not adequately control these medical conditions.

Personalized medicine can probably provide the greatest benefit for serious medical conditions such as cancer. New cancer therapies have specific targets, including over-expressed cell surface antigens and enzymes in the complex web of growth signaling pathways. The cancer drug basket was once filled primarily with non-specific cytotoxics, but new additions to the basket are usually targeted therapies. Instead of a simple visual assessment of biopsy samples looking for abnormal cells, personalized medicine might eventually include an assessment of all drug targets and even an assessment of the activity of various drug combinations against biopsy samples.

The buzz achieved by personalized medicine is a two-edged sword: It looks great during fund-raising campaigns and on grant applications, but if expectations are too high and progress continues to be both limited and slow, governments, philanthropists and investors will turn their attention elsewhere.

For any agency, fund or individual considering an investment in personalized medicine, there are many questions which need to be asked, including:

  • What is the product or service being developed;
  • Is there a path to regulatory approval (if needed);
  • Assuming successful development, can it be used on approval or are other products or long-term data needed for it to be clinically useful;
  • Will use of the new product require healthcare professionals to make major changes to the way they practice medicine; and
  • Does the clinical benefit justify the proposed pricing?

Monday Deal Review: September 16, 2013

 Welcome to your Monday Biotech Deal Review for September 16, 2013! The last week saw significant activity in financing. Of note is Miraculins $1,000,000 private placement, Sirona’s private placement, and Calyx’s proposal of a new private plcaement in response to the over-subscription of its previously announced offering. Finally, Stellar has raised $10 million in the initial closing of its own private placement.

In other news, Medicago is proceeding with its plan of arrangement after havign recieved court approval for the transaction.

See what else is happening in the biotech space by hitting the break!

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