The Cross-Border Biotech Blog

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

Q1 2011 Canadian Healthcare Review: some financing carry-over from the strong Q4 2010

The ‘Q1 2011 Canadian Healthcare Review’, which I [Wayne Schnarr] co-author with Ross Marshall, Vice President Healthcare at The Equicom Group, has now been published. Click here to download the full report (pdf).

The public Canadian healthcare sector started 2011 with a steady but relatively quiet flow of events until Valeant Pharmaceuticals announced that it had made a proposal to acquire Cephalon for US$73 per share in cash. This is just one example of trends which the larger, profitable pharmaceutical and biotechnology companies appear to have carried over from 2010 – growing the top line and product portfolios using acquisitions and growing the bottom line from rationalizing operations, including their R&D infrastructure.

The financing climate for Canadian public healthcare companies was unexpectedly strong in Q4 2010. Some of this strength appears to have carried over into Q1 2011, with gross proceeds of equity and convertible debt financings completed in Q1 totalling $208.2 million. The companies with financings over $10 million which were completed in Q1 2011 are:

  • $58.2 million – GLG LifeTech
  • $40.3 million – Paladin Labs
  • $21.5 million – Centric Health
  • $15.0 million – Novadaq Technologies
  • $14.5 million – Oncolytics Biotech (two warrant exercises)
  • $12.7 million – Bioniche Life Sciences (Canada/Australia offering)
  • $12.1 million – EnWave
  • $12.0 million – IntelliPharmaceutics

Two additional financings (MethylGene for $34.5 million and Medicago for $17.4 million) were announced in Q1 but did not close until April. The first three companies mentioned above are not development stage biotech, being either profitable (Paladin Labs, Centric Health) or focused on manufacturing and marketing (GLG LifeTech) and they account for 58% of the healthcare sector total. Outside of the deals mentioned above, there were 24 financings under $10 million with total proceeds of only $36.4 million, an average of about $1.5 million per financing. Fourteen of the financings were for $1 million or less.

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