October 16, 2012
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The third quarter has always been the slowest for financing public Canadian healthcare companies and 2012 followed this pattern. Gross proceeds of equity and convertible debt financings closed in Q3 totaled only $69 million. Only three companies closed financings over $10 million in Q3 2012:
- Trimel Pharmaceuticals $13.2 million (equity – announced in Q2);
- Centric Health $27.5 million (convertible debt); and
- Resverlogix $25.0 million (debt).
During the first 9 months of 2012, decliners outnumbered gainers by 61 to 37 and 43% of the companies had share price changes of 40% or more in a group of 98 Canadian healthcare companies being assessed for share price performance. A good flow of positive product and company news has been balanced by negative news from some of the well-known companies in the sector, including Aeterna Zentaris, Cardiome Pharma, Theratechnologies and Nordion.
The Canadian sector has also not had that major perception-changing event in 2012, such as a licensing deal by a Canadian company with a major pharma partner and a big dollar up-front payment. While the timing of licensing deals and acquisitions is not predictable, companies expecting to report late stage clinical data in Q4 include:
- Allon Therapeutics – pivotal clinical trial evaluating davunetide for PSP; and
- Trimel Pharmaceuticals – Phase 3 clinical trial evaluating CompleoTRT™ in patients with male hypogonadism.
[The data in this post was compiled for the upcoming Q3 2012 Canadian Healthcare Review, co-authored by myself and Ross Marshall, Senior Vice President, The Equicom Group Inc., a wholly-owned subsidiary of TMX Group Inc.]
May 24, 2012
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Investors are looking for positive events, share price increases and yield from their various Canadian healthcare investments. This quarter’s review looks at delivery on these objectives during Q1 2012. Click here to download the 2012 Q1 Equicom Healthcare Review (pdf).
August 24, 2011
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There is a tendency to focus on clinical and regulatory events when looking at the biotech sector. However, the list of sector events in Equicom’s Q2_2011 Canadian_Healthcare_Review (which I co-author with Ross Marshall, Senior VP at Equicom) shows a greater number of commercial events, including mergers, acquisitions, in-licensing, partnering, R&D agreements and product launches. In the initial weeks of Q3, commercial events have continued to be the focus.
From a financing perspective, it was very similar to Q1. Gross proceeds of equity financings completed in Q2 totalled $157.3 million, with 5 companies completing financings over $10 million: $46.01 million – Leisureworld Senior Care; $34.49 million – MethylGene; $17.40 million – Medicago; US$13.07 million – YM BioSciences; and $12.60 million – Resverlogix.
The financings for public development stage companies in the first six months of 2010 and 2011 were almost the same at $187.9 M and $200.9 M, respectively. There were 16 financings under $10 million with total proceeds of $33.7 million in Q2, versus 25 financings for $37.8 million in Q1.
We often group companies according to their product focus – therapeutics, drugs & diagnostics, services, and others. The companies could also be grouped according to their revenues and profitability. The following assessment was based on a review of the most recent financial statements from each company and occasional assumptions by the authors on performance expected in 2011.
- Revenues – 50 public companies, or about one third of the public Canadian healthcare group, are anticipated to have revenues of $5 million or more in 2011.
- Profitability – 25 of these 50 companies are profitable based on positive net income or, in the case of some REITs, on positive AFFO (adjusted funds from operations). Additional companies have positive EBITDA or cash flow from operations and are close to profitability.
- Dividends and distributions – 10 companies in the sector provide dividends or distributions, important attributes to some investors.
There is something in Canadian healthcare for all types of investors.
June 3, 2010
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You often hear people in this industry reminiscing about biotech booms and praying for another IPO window to open. The three most recent boom/windows were in 1995-1996, 1999-2001 and 2003-2005, each of which was impacted by both positive external market forces and a driving factor within biotech. The most spectacular boom/window was in 1999-2001, with the external trigger being the dotcom bubble and the internal trigger was two emerging technologies, genomics and proteomics, which had potential game-changing attributes that appealed to many dotcom investors. Co-authored with James Smith, Vice President Healthcare at The Equicom Group, this report looks back at the 1999-2001 boom/window, the IPOs and their subsequent performance.