The Cross-Border Biotech Blog

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

This Week in the Twitterverse

If you’re not following our Twitter stream @crossborderbio, here’s what you missed this week:

Ten Business Law Tips for Startups

There are lots of collections of tips for startups that have excellent business advice on building your team, hitting product milestones and pitching to VCs; but not that many that give a corporate lawyer’s perspective. So here’s mine:*

  1. You May be a Genius, but You Are Not a Lawyer
    • Your idea is brilliant and you have what it takes to be a CEO, but you are still not a lawyer (or an accountant).
    • Hire professionals and use them to help you figure out what you need and when.
    • This doesn’t have to be expensive. Figuring out priorities isn’t billable work – executing them is.
  2. Even Though You’re Not a Lawyer, It’s Still Your Job to Read Everything
    • When it comes to your business the buck stops with you
    • You need to read and understand everything you sign
    • Your lawyers’ and accountants’ job includes explaining things you don’t understand
  3. If You Don’t Incorporate, You’re Personally Liable
    • Unless you’ve incorporated (or formed an LP , LLP, S.a.r.l, etc.), you’re personally liable for everything done in the name of the company or by any of your partners
    • One you have a corporate entity, issue shares (or units, etc.) to yourself and your partners – they are the legal basis for corporate power
  4. A Shareholders Agreement is Cheaper than a Lawsuit
    • Unless you’re the only founder, you need to align everyone’s expectations
    • Drafting a shareholders agreement will help you address key controversies in advance
    • Waiting until there’s a dispute is too late
  5. Be Greedy With Your Equity
    • Once you have a shareholder, they are hard to get rid of
    • It’s tempting to use shares for compensation, advisory boards, etc.
    • Try to use non-dilutive cash or options instead
    • Make sure when you do issue equity that it doesn’t constrain your next steps
  6. Pay Your Taxes
    • There are lots of taxes that apply at early stages
    • Payroll taxes, HST, VAT, sales taxes, etc.
    • You can be personally liable if your company doesn’t pay
    • Ignoring taxes only makes it worse
  7. Protect Your IP
    • Get assignments from your inventors or institutions
    • Get signed development agreements before the work starts
    • Talk to an IP lawyer about appropriate patent filings and permissible disclosures
    • Separate your current job from your startup. If you use time, facilities or equipment that belong to your current employer, they could end up owning your new company’s IP.
  8. An NDA May Ruin First Impressions
    • Don’t drive away potential partners or investors with premature or paranoid NDAs
    • Give potential investors and partners enough non-proprietary information to generate interest
    • If in doubt, run planned disclosures by your lawyers and existing investors
  9. Be Honest With Your Customers
    • Make sure your terms of use and policies are clear, but comprehensive
    • If you’re collecting personal information, you need to comply with privacy law
  10. Talk to Your Investors
    • Let them know about progress and challenges
    • Give them advance notice of future financing rounds

* This is not legal advice (duh, it’s a blog), just my thoughts (not my firm’s – see previous) on how to use legal services efficiently when your business is new. I presented a version of these as part of Ogilvy’s How to Draft a Patent seminar at MaRS yesterday.

Two MaRS Innovation Transactions Take Off

MaRS Innovation, the “integrated commercialization platform” responsible for commercializing inventions from 16 Toronto academic institutions, announced two deals last week. One spin-out and one out-license (pdf links).

The spin-out: MI put $500,000 into Prof. Shana Kelley‘s new company, Xagenic, alongside a $300,000 loan from HTX; $200,000 from the Ontario Institute for Cancer Research; and $40,000 from the OCE Centre for Commercialization of Research. The notable part of this transaction is the launch of a University spin-out with pre-built seed funding. The structure of MI’s “investment” was not disclosed.

The out-license: A sustained‐release form of nitric oxide (NO) from Prof. Ping Lee’s lab at U of T was out-licensed to San Diego-based Cardium Therapeutics (AMEX: CXM), which will pay undisclosed amounts for the technology. One form of consideration that is disclosed: a nice endorsement for MI from Cardium’s CEO, Christoper J. Reinhard, who said “MI brought great business understanding to the process. The team understood our needs quickly and they worked efficiently to get the deal done.”

The bottom line: These are two interesting and positive deals from MI, executed in pretty short order for a new organization, that deserve congratulations. We look forward to future MI deals that disclose more some detail on business terms and valuations.

This Week in the Twitterverse

Some weekend reading from our Twitter stream on @crossborderbio:

Biotech Trends Update — Biosimilars Blur IP Constituencies: Novartis and Pfizer-Biocon are Featured in the Economist

Two 9-figure announcements this week mark a turning point for the biosimilars market, and one highlights the increasingly important role India plays in innovation.

  1. Pfizer linked up with India’s Biocon in a deal that will see Biocon take the lead in development of four biosimilar insulin products that gives Biocon $200 million up front. Coverage of the deal in the Business Standard highlights the country’s overall strength in biosimilars, which fall midway between new molecule development and small molecule generics in terms of the R&D and manufacturing sophistication required. Biocon cites the deal as proof that India can move up the value chain, doing for biosimilars what it did for generics. This is especially true if they continue to attract backing and partnerships from the Pfizers of the world.
  2. Novartis’ generics unit, Sandoz, reported Q3 revenues of $292 million from a single biosimilar product — enoxaparin, a copy of Sanofi-Aventis’ anticoagulant Lovenox — which is not expected to hit blockbuster status in its own right. As we have noted before, the high level of expertise required to make biosimilars creates a high barrier to entry and contributes to the field’s attractiveness to traditional pharmas (e.g., Pfizer, above) as well as to the major generics players. FierceBiotech notes further growth is expected as the first biosimilar antibodies hit the market in 2014-2015.

The Economist picked up the relevant trends in an article today entitled “Attack of the Biosimilars“:

1) “Innovator” pharmas are moving into the biosimilars business, reversing their recent role as the predominant plaintiffs in IP litigation:

“…it is ironic that the next great opportunity for traditional drugs firms is to do to the biotechnology interlopers exactly what the generics firms have done to them: shred their profit margins with cheaper copies…”

2) India in moving up the innovation value chain, increasing that country’s incentive to protect IP more forcefully:

“And as if to remind the world that new ideas don’t all come from America, it is the Indian firm that will design and manufacture the original drugs; Pfizer will only market them.”

Bottom line: biosimilars are at least as big a business as predicted. This success is another challenge to the concept that pharma’s patent cliff challenge will be met by more in-licensing from small biotechs or by increased R&D spending. Revenue is revenue, and biosimilars are poised to generate lots more of it.

This Week in the Twitterverse

Lots of great weekend reading from our Twitter stream on @crossborderbio, including news and commentary on the latest in personalized medicine and the Canadian VC landscape:

 

Biotech Trends Update — Personalized Medicine: Duncan’s Personalized Health Manifesto is Primarily Preventative

Image from flickr user Steve Rhodes. Some rights reserved.Journalist David Ewing Duncan’sPersonalized Health Manifesto” was published this week by the Ewing Marion Kauffman Foundation. The most interesting thing about the manifesto* is that it assumes that the technical hurdles to generating and understading a full set of personalized health data have been overcome, and focuses on how that information can be deployed most effectively.  Duncan says that “a widening gap exists in integrating and implementing this promising new epoch of personalized health.” There are two main themes in the manifesto: integration and prevention.

Integration comes from Duncan’s view about how the flood of personalized data should be analyzed by researchers and physicians:

“A balance between specialization and integration needs to be restored,with an emphasis on the whole human organism as much as its parts…”

Prevention is, for Duncan, the natural best use of personalized data:

“Shifting to a health care system based as much on healthy wellness as illness is achievable…”

Both are laudable long-term goals, but I am not convinced of the need for urgent action on either point.

Specialization is (as Duncan acknowledges) what has enabled us to discover personalized markers and to analyze them on a allele-by-allele basis. We are a long way from making meaningful predictions about systemic effects on complex traits based on the available information. A shift too early away from specialization could prevent us from ever developing the underlying science sufficiently to make reliable predictions.

And shifting to a preventative healthcare system is not a goal I view as being unique to personalized medicine. As genomic testing becomes widely available, and patients begin to process their data, complex traits continue to present a challenge for them and their doctors — now that I know I have an increased risk of heart disease, I should shift my diet and increase my exercise. But these are things preventative healthcare advocates have been recommending for decades; and there is no evidence that I’ve seen that suggests the genetic information about increased risk is more motivational than family history, or peer behaviour, or any other non-personalized factor.

Bottom line: I’m no expert on manifestos, but while there’s nothing in this one I feel strongly opposed to, it doesn’t move me to action either. Read the whole thing (it’s not very long) and form your own (personalized) view.

* Other than his decision to call it a manifesto.
Image from flickr user  Steve RhodesSome rights reserved.

Biotech Trends Update — Biosimilars: FDA Meeting Formally Announced, EMA Working on Rules for (a few) Antibody Biosimilars

Reuters reports that the European Medicines Agency (EMA), which has already approved 13 biosimilars, is expecting to publish guidelines in November on biosimilar antibody therapeutics. EMA Executive Director Thomas Lonngren said that clinical trials will be required for antibody biosimilars (as they are for the products EMA has approved to date), but that requirements were likely to be less onerous than in the United States.

Reuters says that the small number of requests (six) received by EMA so far “reflects the difficulties of making such copycat medicines [antibodies]” but with the earliest therapeutic antibodies coming off patent (in Europe) in 2014, I expect these initial inquiries are just the tip of the iceberg. Of couse, biosimilars are hard (as we’ve noted); but a lucrative opportunity of that scale will not go untapped.

Meanwhile, as expected based on the draft notice leaked in September, the FDA is holding public meetings on the implementation of the Biologics Price Competition and Innovation Act (i.e., the biosimilars legislation). The full Federal Register notice (pdf) is up, and Mark Sernak at eyeonfda.com has extracted the questions posted for comment.

In addition to a long list of scientific and technical questions, there are a couple of inquiries that I’d highlight from a corporate law perspective:

  1. Which types of related entities may be ineligible for a period of 12-year exclusivity for a subsequent BLA, given the “potential transfer of BLAs from one corporate entity to another and the complexities of corporate and business relationships”; and
  2. Whether the existing fee structure under the Prescription Drug User Fee Act (PDUFA) should be considered as a model in establishing a user fee structure for biosimilar applications.

Interested in attending or in submitting a comment? The FDA’s meeting information page is here, and it includes webcast access for November 2 and November 3.

Canadian Venture Capital Data from Q2 2010 Shows Big Jump From Q2 2009 but Only Moderate Increase for Biotech

The Q2 issue of Industry Canada’s Venture Capital Monitor is up, and it shows “the highest level of VC activity since Q3 2008,” though that is still “significantly lower than the quarterly average of $440M recorded over the previous five years before the downturn.”

A couple of (particularly) parochial notes:

  1. First-time deals at the seed and start-up stages of development were hurt by a decline in first-time, early-stage investments in Ontario, which recorded only one new deal at the seed or start-up stage in Q2 2010.
  2. Biotech investment saw a 13% increase to $91 million, but it paled in comparison to the 71% increase for IT (to $149 million) and the 377% increase (to $56 million) for “energy and environmental technologies.”

How does the future look? Steady overall. Canadian VC fundraising was down a bit (7% from Q2 2009), totalling only $255 million; but for the year ended June 30, 2010, the total raised was “roughly the same as the annual average from 2005 to 2008.” There is no sector breakdown, though, and everyone our neck of the woods knows we’re due for a turnaround in in Canadian life sciences VC fundraising.

This Week in the Twitterverse

Here’s some weekend reading from our Twitter stream on @crossborderbio …

  • Friday Science Review is back, thx to Mark Curtis! Today’s cool Canadian science = tomorrow’s cool startups… http://ow.ly/19f2te1
  • DTC genetics link in last tweet is from @CMAJ_News – also contrasts Class III regulation of companion diagnostics. I.e. DTC is non-clinical?
  • MT @genomicslawyer: …Health Canada is taking a “far more relaxed approach” than U.S. regulators to DTC genetics http://bit.ly/bX3Il7
  • RT @JohnCFierce: Covance is buying 3 R&D facilities from sanofi and inked a 10-yr research contract worth up to $2.2B http://reut.rs/dBbQ7F
  • RT @MSBiV: Leap Medical completes second tranche of financing http://bit.ly/dl7KbL a @McGillU spin-off and @MSBiV investee
  • Planning to! RT @robannan: I’m going – anyone else? RT @JVPLS @sciencepolicy Canadian Science Policy Conf Mtl Oct.20-22 http://ow.ly/2KpWG
  • Biovail, Valeant shareholders vote to approve merger, expected to close tomorrow. http://bit.ly/aAstb0
  • RT @MaRSDD: Blog – Got a management challenge? Win a ticket to see Malcolm Gladwell! … http://bit.ly/cdQkDv
  • RT @genomicslawyer: BGI as one of China’s multiple “moon shots”, as told by Thomas Friedman of NYT: http://nyti.ms/aJlNvY H/T @phylogenomics
  • Happy Bday! RT @IlseTreurnicht: Birthday cake @MaRSDD: 5 years since opening of the MaRS Centre today…
  • Healthcare giving down in the U.S. and up in Canada (2008 vs 2009, tho 2009 in Canada just = recovery to 2006 levels) http://bit.ly/aaENDU

More OETF Investments Announced, Including NeurAxon

The Ontario Emerging Technologies Fund got off to a bit of a slow start on the life sciences front, but last month it added Lumira and CTI Life Sciences as qualified investors.

Now, CTI has taken advantage of that status with OETF participating in a $14 million round of convertible debentures issued by NeurAxon, along with Delphi Ventures, OrbiMed, Ventures West, H.I.G. Ventures, BDC, NeuroVentures Fund and Lawrence Bloch (NeurAxon’s CEO).

Other investments announced today were in Covarity (software for commercial loan portfolio management) and Shoplogix (real-time performance management solutions for manufacturers), meaning a full 1/3 was allocated to life sciences in this batch. Good news for CTI and for Ontario life sciences companies.

Hat tip to MRI on Twitter (@OntInnovation) for this announcement. Note CTI is an Ogilvy client.

Biotech Trends Update — IP Constituencies: Endo’s Qualitest Purchase Shows Full Integration of Innovator and Generic Strategies

Endo Pharmaceuticals (NASDAQ: ENDP) announced yesterday morning that it will spend $1.2 billion to buy U.S. generics company Qualitest Pharmaceuticals. Endo also has an active pipeline of “innovative” products in development, emphasizing the industry trend we’ve been following of a narrowing distinction between innovator and generics companies.

Endo began its modern existence after being spun out of DuPont Merck in 1997, where it had been that company’s generics division. Instead of continuing in as a pure generics company, though, Endo in-licensed Lidoderm in 1998 and since then has mixed generics and innovative programs with wanton disregard for the traditional industry divide. In fact, Endo’s planning seems to be focused more on product classes than on patent status. The Qualitest purchase, for example, was framed as an expansion of their pain franchise. Another example of Endo’s non-traditional aggregation is pairing the Bioniche license for Urocidin (an innovative bladder cancer product in Phase III) with their purchase of HealthTronics (a urology services and equipment company).

As companies like Endo look to replace revenue from expiring patents, don’t expect them to do it in traditional ways or by sticking to traditional silos. Check out other examples here, or point me to others in the comments.

This Week in the Twitterverse

Lots of great weekend reading from our Twitter stream on @crossborderbio, including a plane that flies like a bird, a $450 million licensing deal and links to several worthwhile upcoming events:

Cross-Border Biotech Blog News: Favourite Features Returning With New Authors

I’m excited to announce that the Monday Biotech Deal Review and the Friday Science Review will be back next week to restart your regular dosing of Canada’s Biotech inventions and transactions.

The Monday Deal Review will be authored by Jacob Cawker, who has worked with me on the blog in various capacities over the past three years. Jake recently joined Ogilvy Renault LLP as an associate in the Business Law group, and will be part of our Life Sciences transactional team.  He has an Honours Bachelor of Science from the University of Toronto at Mississauga with a specialist in Psychology and a particular interest in neuroscience, and he worked in a behaviour genetics lab at the University of Toronto before entering law school at Osgoode Hall University.

The Friday Science Review will be authored by Mark Curtis, who recently left scientific research to pursue various consulting positions in the biotechnology sector. He has frequently worked as a consultant to Bloom Burton & Co., a boutique investment bank in Toronto that focuses exclusively on the biotechnology and healthcare industries. Prior to this he carried out research at the Ontario Cancer Institute where he focused on cellular reprogramming of human cells. Mark completed a Master’s degree in Biotechnology, with a specialization in stem cell biology, at the University of New South Wales in Sydney, Australia.

Why Technology Transfer Offices Should Focus on Sponsored Research and Ignore Royalties: In Praise of UNC’s “Express License”

A story by Xconomy’s Sylvia Pagán Westphal yesterday highlights a new approach to technology transfer licensing being taken by UNC Chapel Hill’s Office of Technology Development: The Carolina Express License. At first glance, the agreement looks, as Westphal puts it, “not very sweet for the university.” UNC takes 0.75% of any exit transaction, but no equity, no milestones and only a 1% or 2% royalty. Here’s Westphal’s description of the UNC approach (including a witty juxtaposition of religious imagery):

“They call it the holy grail of tech transfer, though critics, I reckon, think of it more as heresy. Either way, it’s gutsy.”

Count me in the group that considers it tech transfer Nirvana Nirvana.

Why? Maximizing revenue from individual licenses is the wrong priority for University tech transfer. As UNC’s Cathy Innes says:

“Where we hope to gain is that if we get a lot of companies started, more of them will be successful and have more products on the market, so we’ll be more successful…”

The University of California tech transfer system calls this the “Home Run Model,” (pdf) recognizing that even with 420 companies founded and 800 products on the market, nearly half of all licensing revenue comes from the top 5 products and the top 25 accounted for 75.6% of all 2009 licensing revenue. If more companies are started, there’s a better chance one of them is the home run.

Here’s another reason: easier licensing negotiations mean more sponsored research, and sponsored research is way bigger than licensing. For example, the USC Stevens Institute for Innovation took in $7 million in licensing revenue in 2008; but nets $500 million annually in sponsored research. Even tech transfer powerhouse Stanford takes in almost 7 times more money from industry-sponsored research than it does from licensing (PowerPoint). A small increment in sponsored research would easily offset the marginal licensing revenue sacrificed in UNC’s template.

Since December when the Express License was introduced, it has been used to found 6 companies out of UNC. Whether these six succeed or fail, I bet every person involved — the P.I.s, the founders and the funders — will be more likely to work with UNC again than if they had negotiated an individualized license. Westphal quotes Lita Nelsen, director of the Technology Transfer Office at MIT as saying the University license “is not the hard part of the problem,” but the UNC model sounds vastly less painful than every tech transfer story I’ve heard or been involved in.

Bottom line: a better tech transfer experience = an easier start-up = more companies = more sponsored research = more tech transfer wins. Here’s hoping that UNC’s Express License goes forth and multiplies.

Twitter connection: hat tip to @ldtimmerman and @Michael_Gilman for links to the Xconomy story. Follow Sylvia Pagán Westphal on Twitter at @sylviawestphal or as part of my Twitter list of Biotech Pharma and Health personalities.

Biotech Trends Update — Biosimilars: FDA Meeting in November to Discuss BCPI Act Implementation

Adam Feuerstein at TheStreet.com reported this morning on a draft FDA notice for a planned November meeting on implementation of the Biologics Price Competition and Innovation Act, which was passed as part of the healthcare reform legislation.

The BPCI Act (42 U.S.C. 262(k)(8)) provides for the FDA to author guidance “with respect to the licensure of a biological product” — pretty broad, so we’ll have to stay tuned for the actual meeting notice. However, the legislation provides some hint in permitting “product class-specific guidance” specifying criteria that will be used to determine whether a biological product is highly similar to a reference product in such product class.

If the FDA decides to move ahead with product class guidance, it would likely specify the criteria that will be used to determine whether a biological product meets the standards for “interchangeability”.

In other cases, the FDA may determine that “the science and experience [to date] … with respect to a product or product class … does not allow approval of a [biosimilar] for such product or product class.”

Bottom line: following the FDA’s November meetings, biosimilars will be one step closer in the U.S.

P.S. Adam Feuerstein cites Alec Vachon (@HEALTH_NOTES) on Twitter for breaking the story Friday. Not sure why I haven’t found him before, but Alec is now added to my Biopharma-IT-Health Twitter list.

Flow-Through Shares for Biotech: Welcome to National Biotechnology Week in Canada

Tomorrow is the first day of National Biotechnology Week in Canada. The imagenation.ca website has lots of info, and you can follow @BIOTECanadaNBW on Twitter.

One of this year’s big policy initiatives is a push to expand Canada’s Flow-Through Shares program from mining and wind power to include biotech and other cleantech companies. I gave a short presentation today on what Flow-Through Shares are, how they work and why they’re a great idea for Canada’s biotech industry.* Enjoy:

Happy National Biotechnology Week, everyone!

*Modified from a presentation authored by Ogilvy’s Flow-Through Guru Rick Sutin.

Agricultural Biotechnology International Conference (ABIC) In Saskatoon This Week Highlights Canada’s Strength in Ag-Biotech

The ABIC conference in Saskatoon this week is highlighting Canada’s strength in the field (har). Canada has world-class resources to compete: plenty of arable and marginal land, and bushels (sorry) of know-how and innovation.

Two Canadian announcements of note at the conference:

  1. Saskatchewan’s Premier, Brad Wall, announced $5 million over 4 years for ag-bio projects. The funds will be provided through the Province’s Agriculture Development Fund, which takes applications annually in a March 1 to April 15 window.
  2. Linnaeus Plant Sciences announced “a licensing agreement with DuPont to use oil gene intellectual property, advanced gene technologies and biotechnology expertise developed by DuPont to accelerate development and commercialization of value-added Camelina oil” with the goal of developing “industrial applications for oil seeds for uses beyond fuels, including hydraulic fluids, greases and polymer production.”*

The recent moves toward FDA approval for AquaBounty’s genetically-enhanced salmon are another example of Canadian strength, though it’s outside the scope of ABIC.

The conference is not as new-media-savvy as I’d like; but for more news from ABIC 2010, keep an eye on the dead tree and online versions of the StarPhoenix, which has been reporting from the meeting.

* Disclosure: The CEO of Linnaeus, Jack Grushcow, is my uncle and Ogilvy Renault worked on this deal.

Gone Fishing

I am taking a break from the online world for a couple of weeks and will be back after Labo(u)r Day. Until then, check out the industry trends pages or my Twitter list of biopharma and health news sources. See you in September!

Monday Biotech Deal Review: August 16, 2010

Another decent week for Canada’s biotech companies, with about $30 million of securities sold and more deals launched. Big headlines this week for Alectos’ Alzheimer’s collaboration with Merck, which gets a US$289 million number but declines to split out the up-front payment or other details of the fee structure. Also, eHealth Ontario is spending significant money again, this time awarding a $46.5 million contract to a CGI subsidiary for work on a chronic disease management system. Finally, Biovail sold some CRO assets in a deal that passed under the radar until their Q2 report. 

And, to make sure an important thank-you doesn’t fly under the radar, I’d like to include an above-the-fold thanks this week to Keldeagh Lindsay, the Ogilvy Renault student who has been doing a great job helping out with the Monday Biotech Deal Review all summer. And now,

Read more of this post

This Week in the Twitterverse

Here’s some reading for the weekend from our Twitter stream on @crossborderbio:

Ontario Emerging Technologies Fund (OETF) Shows Signs of Life (Sciences), Adds Biotech Investments and Investors

An announcement this morning from the OETF — Ontario’s (née) $250 million co-investment fund — shows positive signs for potential matching investments in the life sciences.

First, the OETF announced an investment in Natrix Separations. BDC wore the “Qualified Investor” hat on that one, but Natrix is in GrowthWorks’ Canadian Fund portfolio, so we know at least one life sciences VC has found a way to access the OETF funds.

Second, the OETF announced that Lumira Capital and CTI Life Sciences Fund are now Qualified Investors. Both have extensive life science portfolios (Lumira, CTI) and recent successful exits (Lumira: Resonant, Ception; CTI: TargeGen).

So, is this the tip of the biotech iceberg for the OETF? The level of disclosure required to qualify has been cited as a barrier to VC participation in OETF investments and some structural challenges remain for life science companies hoping to leverage the fund’s money; so it’s too soon to say. It sure is encouraging to discover that these challenges aren’t prohibitive. Stay tuned…

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Monday Biotech Deal Review: August 9, 2010

Catching up from the long weekend last week, we have a full two weeks’ worth of deals to bring you. Highlights include $16.7 million of securities closings, $8.25 million launched; and interesting developments in the Forbes Medi-Tech and Northstar Healthcare acquisitions. Check out what the last two weeks have wrought… after the jump

This Week in the Twitterverse

Even though posts have dropped off between the long weekend last week and some business travel, I’ve been keeping Twitter up to date and will resume with a two-week deal review on Monday. In the meantime, here’s some reading to catch up on:

FedDev Ontario is Feeding $45 million Through NRC-IRAP to Support SMB Innovation

During a visit to Sernova (TSXV: SVA) today, Gary Goodyear* announced that $45 million of FedDev Ontario money will be deployed through the NRC’s Industrial Research Assistance Program (IRAP).

IRAP has been a relatively effective vehicle for funding life science companies and has taken a prominent role since having been allocated $200 million in the 2009 federal budget. In 2010, NRC-IRAP has funded companies directly, including Isotechnika, Critical Outcome Technologies and Covalon (among others) and indirectly through the Health Technology Exchange (HTX).

Sernova press-released the announcement today, noting that they received $486,000 from NRC-IRAP in the 2009-2010 cycle; but it was unclear whether that funding was part of the FedDev allocation or whether FedDev-IRAP funds were forthcoming in the 2010-2011 cycle.

* Yes, Gary Goodyear is now the Minister of State for FedDev Ontario.

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Monday Biotech Deal Review: July 26, 2010

Things were interesting for Forbes Medi-Tech (or at least its creditors), which saw a new bidder emerge for its assets. A few placements and other deals closed, some lower than expected. See who made it through the heat without wilting this week after the jump…

This Week in the Twitterverse

Here’s some reading for the weekend from our Twitter stream on @crossborderbio:

Q2 Canadian Healthcare Review Shows Biotech Financing Weakness but Some M&A and Regulatory Wins

Data in the Q2 2010 Canadian Healthcare Review from the Equicom Group (co-authored by James Smith, Vice President Healthcare at Equicom and myself) shows a continuation of the weakness in biotech financing that was outlined in last week’s Toronto presentation of Ernst & Young’s Beyond Borders global biotech report. The public Canadian development stage companies raised $72.7 and $187.9 million in Q2 and H1, respectively. The financing total in the first half of 2010 for these companies is 78% of the H1 2009 total but is less than one third of the first half average for 2005 to 2007.

As in the first quarter, the events for the sector were largely positive, including two NCEs receiving positive regulatory recommendations: Theratechnologies’ tesamorelin (Egrifta) from an FDA advisory committee, and Cardiome’s BRINAVESS (iv vernakalant) from a committee of the European Medicines Agency.

In the largest M&A transaction by a Canadian therapeutics company since Shire acquired BioChem Pharma, the Biovail name will be replaced by Valeant after the merger of the two companies. M&A was also prominent among the private Canadian companies as three companies announced in the second quarter that they will be acquired – VisualSonics, Resonant Medical and Verio Therapeutics – followed by Sentinelle Medical in early July.

After over thirty years in this industry, I have learned that the only constant in biotech is change – business models, funding levels, hot technologies, approval hurdles at the FDA, investor strategies, etc. Every company has its own unique set of risks and rewards and management has to balance these in the context of this constantly changing set of environments – not an easy task.

However, simply complaining and waiting for markets to improve is not an option. For companies which cannot afford to run the next clinical programs, shareholder value declines as the cash dwindles and the companies with competitive products and cash move ahead. Reduced R&D spending is an opportunity for those companies which have the clinical data needed to sell or license their products, but the markets for those products can also change rapidly.

Monday Biotech Deal Review: July 19, 2010

Lots of deals this week. Some good news, some bad news. On the good news front, a steady volume of securities and M&A activity is continuing through the summer; and one Canadian firm benefits from the U.S. Defense Departments exploration of RNAi products as anti-virals. On the other hand front, though, a licensing option expired, a liquidation proceeded and marketing rights were voluntarily surrendered. See who’s who after the jump…

This Week in the Twitterverse

Here’s some reading for the weekend from our Twitter stream on @crossborderbio:

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