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

Category Archives: Wayne Schnarr

Some Partnering Basics: Part 16 of Valuation and Other Biotech Mysteries

[Ed. This is the sixteenth part in Wayne's series. You can access the whole thing by clicking here. Please leave comments or questions on the blog and Wayne will address them in future posts in this series.] If partnering is basically the process of selling an asset, the first step is to let people know [...]

Partner, Sell, or Go it alone: Part 15 of Valuation and Other Biotech Mysteries

[Ed. This is the fifteenth part in Wayne's series. You can access the whole thing by clicking here. Please leave comments or questions on the blog and Wayne will address them in future posts in this series.] This is a discussion that the management and board of a company need to start as the company [...]

Some Top-Line Numbers From 2011 For Public Canadian Healthcare Companies

The numbers have been crunched in preparation for the 2011 Canadian Healthcare Annual Review, which I co-author with Ross Marshall, Senior Vice President at The Equicom Group. Prior to its publication later this month, we are going to give you a look at some of the top-line numbers. The biggest concern in the sector is [...]

Assessing Potential Market Share for a New Drug: Part 14 of Valuation and Other Biotech Mysteries

[Ed. This is the fourteenth part in Wayne's series. You can access the whole thing by clicking here. Please leave comments or questions on the blog and Wayne will address them in future posts in this series.] In the previous post, we looked at epidemiology and pricing to estimate the market size for a new [...]

Potential Rewards from Successful Drug Development: Part 13 of Valuation and Other Biotech Mysteries

[Ed. This is the thirteenth part in Wayne's series. You can access the whole thing by clicking here. Please leave comments or questions on the blog and Wayne will address them in future posts in this series.] Finally we have reached the point of looking at the potential rewards from successful drug development. The potential [...]

Expansion and Diversification Strategies in the Pharmaceutical Industry: Part 12 of Valuation and Other Biotech Mysteries

[Ed. This is the twelfth part in Wayne's series. You can access the whole thing by clicking here. Please leave comments or questions on the blog and Wayne will address them in future posts in this series.] Brand, human prescription drugs is the core business of the pharmaceutical industry. Risk can be diversified and potential [...]

Q2 2011 in Canadian Healthcare – Commercial Events were the Focus

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 [...]

Valuation and Other Biotech Mysteries – Part 11: Changes in Pharmaceutical Industry Product Portfolios and Strategies

[Ed. This is the eleventh part in Wayne's series. You can access the whole thing by clicking here. Please leave comments or questions on the blog and Wayne will address them in future posts in this series.] As described in the prior post, the modern pharmaceutical industry has evolved from the patent medicine companies selling [...]

Valuation and Other Biotech Mysteries – Part 10: Some Pharmaceutical Industry History

[Ed. This is the tenth part in Wayne's series. You can access the whole thing by clicking here. Please leave comments or questions on the blog and Wayne will address them in future posts in this series.] Very few novel drug development companies have made, or are likely to make, the transition to profitable and [...]

Valuation and Other Biotech Mysteries – Part 9: Retail Investors

[Ed. This is the ninth part in Wayne's series. You can access the whole thing by clicking here. Please leave comments or questions on the blog and Wayne will address them in future posts in this series.] In addition to the private institutional VCs, there are the retail investors who are willing to take similar [...]

Valuation and Other Biotech Mysteries – Part 8: The Current State of Healthcare Venture Capital

[Ed. This is the eighth part in Wayne's series. You can access the whole thing by clicking here. Please leave comments or questions on the blog and Wayne will address them in future posts in this series.] The world of healthcare VCs has changed dramatically in the two decades which I have spent in capital [...]

Valuation and Other Biotech Mysteries – Part 7: Funding the Cost of Developing a New Drug

[Ed. This is the seventh part in Wayne's series. You can access the whole thing by clicking here. Please leave comments or questions on the blog and Wayne will address them in future posts in this series.] Assuming that the average direct cost of developing a new drug through regulatory approval will be at least [...]

Valuation and other biotech mysteries – Part 6: The cost of developing a new drug

[Ed. This is the sixth part in Wayne's series. You can access the whole thing by clicking here. Please leave comments or questions on the blog and Wayne will address them in future posts in this series.] The Tufts Center for the Study of Drug Development has been the source of the most comprehensive studies [...]

Valuation and other biotech mysteries – Part 5: More strategy and structure for Phase 3 clinical trials

[Ed. This is the fifth part in Wayne's series. You can access the whole thing by clicking here. Please leave comments or questions on the blog and Wayne will address them in future posts in this series.] In the previous case study, we looked back at Theratechnologies and theFDA approval of EGRIFTA™ (tesamorelin for injection). [...]

Pharma / Biotech R&D Budgets – A Proposal For Measuring Performance

During the BioFinance 2011 conference held in Toronto last week, one presenter showed a slide that outlined the number of new chemical entities (NCEs) approved by the FDA over a number of years. Since this slide was used in the context of the increase in global industry R&D budgets, it was meant to show that [...]

Valuation and other biotech mysteries – Part 4: Strategy and structure for Phase 3 clinical trials

[Ed. This is the fourth part in Wayne's series. You can access the whole thing by clicking here. Please leave comments or questions on the blog and Wayne will address them in future posts in this series.] Very few independent Canadian biotech companies have successfully completed the development of a novel drug – so my [...]

Valuation and other biotech mysteries – Part 3: What are you valuing?

[Ed. This is the third part in Wayne's series. You can access the whole thing by clicking here. Please leave comments or questions on the blog and Wayne will address them in future posts in this series.] Most likely you will be valuing a company, a product or a technology. The valuation of the stream [...]

Valuation and other Biotech Mysteries Part 2: Some Basic Mathematics

[Please note that this blog series has not been pre-written. The subject of the next post in the series will be determined by where the current post leaves off and any questions that readers send me or leave as comments on the posts.] When you create a valuation spreadsheet, you are plugging in numbers representing [...]

Valuation and Other Biotech Mysteries – Part 1

I have been doing valuations in various forms since 1981 when I started my MBA at York University. There are major differences between those initial valuations and the ones that I have been doing as a biotech stock analyst over much of the last 20 years. Those initial valuations were for assets or profitable companies, [...]

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 [...]

Flow-Through Shares for Healthcare Part 3 of 3: What If It Actually Happens

Part 1 of this series described the basics of flow-throughs and Part 2 examined both the structure and the level of financing that flow-through shares have provided to the mining and oil & gas industries. This part analyzes the factors contributing to a decision by the government to expand flow-throughs to healthcare and biotech companies, [...]

Flow-Through Shares for Healthcare Part 2 of 3: Flow-Throughs in Mining and Oil & Gas

In Part 1 of this series, we mentioned two flow-through share financings completed in 2010 (chosen at random for illustrative purposes). The following discussion examines those financings in more detail, and puts them in the context of overall funds raised by the mining industry in recent years.

Flow-Through Shares for Healthcare Part 1 of 3: What Are Flow-Through Shares?

The extension of flow-through tax incentives to development stage biotech and healthcare companies has been discussed for many years, including twice previously on this blog (here and here). One of the most recent articles supporting this change was written by David Allan, a former investment banker who is a founder and current Chairman of YM Biosciences [...]

2010 Canadian Healthcare Review: Success and Momentum Building

We had just finished the Q3 2010 report when I attended BioContact Québec in early October and the mood was discouraging. My co-author on these reports (James Smith, VP-Healthcare at Equicom) was in San Francisco in January for the annual JP Morgan conference and he described the overall mood as optimistic. What happened in those [...]

Biotech Financings: Preview of 2010 Data Shows Momentum for 2011

The ‘2010 Canadian Healthcare Review’, which I co-author with James Smith, Vice President Healthcare at The Equicom Group, will be published in about two weeks. One of the components of this review is a summary of the financings by public Canadian healthcare companies. Equity and convertible debt financings by public Canadian healthcare companies totaled $866.9 [...]

Canadian Biotech and Healthcare Licensing Trends in 2010

I was fortunate this week to host the Canadian Healthcare Licensing Association‘s (CHLA’s) annual holiday get-together on behalf of Ogilvy Renault at our Toronto office (we hosted a parallel CHLA event in Montreal earlier this week). I presented a short slide deck on licensing trends in 2010, with data drawn from our Monday Biotech Deal [...]

Q3 Canadian Healthcare Review – Weakness Continues BUT Some Bright Spots

Data in the Q3 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 which we have seen in 2009 and 2010. Bounceback From the Financial Crisis May Have Masked 2009 Weakness While the level of funding [...]

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 [...]

Biotech’s Murky IPO Window Increases M&A Attractiveness

A recent press release from Burrill & Company points out that only 1 of 8 U.S. biotech IPOs in 2010 is currently trading above its IPO price. IMRIS was the last Canadian biotech IPO, completed in November 2007 at $6.00, and it is currently trading at $5.50 after dipping under $2 in late 2008. Facing these [...]

Biotech IPOs Past — 10 Years After the Biotech Venture Capital Boom of 1999-2001

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 [...]

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