The Cross-Border Biotech Blog

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

Tag Archives: biotech

This Week in the Twitterverse

Tweets I tweeted this week @crossborderbio:

Trends Update — IP Constituencies: Rotman Article Explores Canadian Biotech Collaborations with Developing Countries

A very interesting article in Nature Biotechnology from a group at the McLaughlin-Rotman Centre for Global Health provides some empirical support for a trend we’ve been following of increased innovative activity in developing countries

According to the article, over 25% of Canadian biotechs collaborate with developing countries.  Of these, however, the vast majority of companies do so alongside collaborations with other developed country partners — only 4% collaborate exclusively with developing countries.  Also, gaining access to developing countries’ markets is the most frequent (66%) reason cited for collaboration.

Still, some of the data reflects the growing importance of developing country collaboration (China and India in particular):

  • Canadian firms’ collaborations with India (17) and China (22) nearly equal the number of collaborations with Japan (18) and Germany (23); and
  • Accessing knowledge from developing countries’ partners (24%) is approaching providing knowledge to developing countries’ partners (37%) as a reason for collaboration.

How do these collaborations look overall?

Collaborations article - nbt0909-806-F4

The figure from the paper on the left shows the geography of, and rationale for, the collaborations. Part “a” shows marketing and distribution collaborations, and part “b” shows those involving an R&D component.

 

What is the effect of all this activity?

Well, it’s hard to quantify, but the authors review revenue data from public company respondents and find that:

“average total revenues of firms that have North–South collaborations are nearly four times higher than firms that do not have such partnerships.” 

My bottom line: causal or not, that’s a correlation that should cause all biotech companies to take note.

Rumoured Omeros IPO Might Signal Newly Opened Window

light at the end of the tunnel smallAn article in Xconomy Seattle today reports rumours that Omeros, a company that has been around since 1996 and has raised over $102 million in private money, may revive its 2008 IPO plans.

The company’s lead products — “proprietary low-dose combinations of existing drugs” — are more pharma than biotech, putting it in line with Cumberland’s recent IPO.  However, Omeros also has a pipeline of preclinical CNS and inflammation molecules, so if its IPO succeeds, it may indicate that the public markets are truly (despite some skepticism) opening again to biotechs.

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Cumberland Ends Bio IPO Drought But Prices Under Range. Next Up, Emdeon.

Cumberland Pharmaceuticals (NASDAQ: CPIX) raised $85 million in its IPO today, pricing at $17 per share.  This was less than the $19-21 per share range, but since it’s the first bio IPO since November 2007 we won’t complain.

The company is planning to use the proceeds to buy late-stage or approved therapies for acute care and gastroenterology to go along with their existing approved products — Caldolor, an IV form of ibuprofen, and Acetadote, which treats acetaminophen overdose.

The WSJ Health Blog notes that Cumberland is the first of two planned healthcare IPOs this week.  Stay tuned for Emdeon, an electronic medical-billing systems company that is looking for over $330 million tomorrow.

This Week in the Twitterverse: August 8, 2009

twitter_logo_headerSince I’ve been using Twitter to note short but interesting items that don’t require a whole blog post, I thought I’d post a re-cap of the week’s Tweets.  So, for those who aren’t on Twitter and haven’t been reading the @crossborderbio feed in the column to your right (or who read the blog by RSS), here’s what you missed:

  • Big confirmations day in the U.S. Senate: Sotomayor (S.Ct.), Collins (NIH) and Kappos (USPTO) in one fell swoop http://tr.im/vWan
  • Things are looking up when … biotech bankers and analysts have job options! Some movement in Toronto: http://tr.im/vUVG
  • First EU guidelines for growing GM plants for pharming published, get positive initial reviews, says Nature http://tr.im/vT0e
  • Today’s Canadian science = tomorrow’s Canadian start-ups. Check this week’s Friday Science Review on the blog: http://tr.im/vS3W Go Richard!
  • New blog post analyzing Q2 VC investment numbers for Canadian biotechs – bad, but Q3 is already better http://tr.im/vPci H/T @startupcfo
  • OncoGenex goes it alone, sells $9.5 mm of straight equity and net $9.4, ISO for Phase III http://tr.im/vNz9 H/T @ldtimmerman @FierceBiotech
  • Another cancer personalized medicine success for DxS: AZ partnership for Iressa http://tr.im/vGya after BI & Amgen deals http://tr.im/vGyO
  • Saskatchewan proposes new isotope reactor as part of nation-wide expressions of interest for Nov. 30 report http://tr.im/vGvI
  • RT @gw_dailyscan: GI Bill and More Scientists: President Obama says this GI Bill, like the last, may lead .. http://bit.ly/15Xwop
  • New Blog post: What makes MIT so good at entrepreneurship: http://tr.im/vtwD
  • Adaltis Inc. (TSX: $ADS) files for liquidation under BIA http://tr.im/vrVv follows July’s CCAA filing noted on the blog http://tr.im/vrWb
  • For anyone thinking of not vaccinating their kids… RT @drval: NewPost: Dr. Sears Cashes In On Vaccine Fears http://bit.ly/EiyMd
  • Canadian Science Policy Conference speaker list grows. Oct 28-30. Res Forum Blog >> http://tr.im/vres CSPC web >> http://sciencepolicy.ca/
  • H/T @FierceBiotech: Lilly Ventures has spun out of Eli Lilly with $200M, WSJ says it’s more “Ventures” less “Lilly” http://is.gd/2253B
  • Another environmentally friendly application of genetically-modified plants: lure nematodes, use less pesticide: http://tr.im/vonO
  • I will! RT @drval: Everyone check out @scotthensley ‘s new health blog at NPR: http://bit.ly/2k045X <– Hope you’ll blogroll
  • Old SBIR extended (again) to Sept 30 as conference committee fails to reconcile House and Senate bills before recess http://tr.im/vhKW
  • Just now getting caffeinated this morning… RT @fodden: RT @slaw_dot_ca Civic Holiday Today >> Slaw http://bit.ly/BfSGa
  • Isotope shortage in Canada not affecting patients as much as expected, but costing hospitals a lot for alternate supply http://tr.im/v0Qq

Do the Q2 Venture Capital Numbers plus the HGS Success Indicate a Light at the End of the Tunnel for Biotech Funding?

light at the end of the tunnel smallMany of the articles and talks on biotech funding over the past year or so have lamented that public markets are closed to biotechs, and that the absence of a public exit, coupled with the preference for licensing over M&A by big pharma, would seriously dis-incentivize venture funding for biotech startups.  Two data points this week suggest the tide may be turning:

  1. Human Genome Sciences’ drug candidate for Lupus shocked analysts, showing positive results in its clinical trial, which sent HGS shares up almost 400% and boosted shares of two other companies working on products in the same pathway.  More importantly, it reminded risk-seeking investors of the outsize returns that make them love biotech stocks.  Remember last week’s NVCA study showing a 20% cost-of-capital for biotech?  Everyone (including me) focused on the take-away argument for biologics exclusivity, but now is a good time to remember that the cost-of-capital calculations are backed into from the historical (outsized) returns shown by biotech’s success stories.
  2. PwC-NVCA numbers released Monday showed biotech as the biggest recipient of funds in Q2, exceeding every other industry (thanks in part to the crappy numbers for other industries, but still…), and getting $3.67 billion for 612 companies January-June.

The change in mood has been immediate.  One obvious example is this piece in the WSJ’s Venture Capital blog that touts the value of biotech partnering deals as a boon to investors.  The same partnering deals that just a few weeks ago were described as barriers to VC exits are now a rationale for follow-on investment.

Not that there aren’t still challenges.  The Aveo Pharma deal in the WSJ post has two important features — they retained key assets for an M&A or public exit and their partner took equity in the licensing deal —  but a few more headlines like “Biotech Start-Ups Striking It Rich With Partnerships” and we could be on the road to a biotech recovery.

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$700 Million Close Opens the Doors at Teralys Capital

Teralys Capital, the fund-of-funds announced in Quebec’s budget in March, actually closed on its $700 million today and “is now ready to move ahead with its mandate to finance private venture capital funds that invest in technology companies in the life sciences, information technology and clean technology sectors.”  (I guess the extra $125 million they were planning to raise from the private sector went to Excel’s new fund instead!)

I’m still not sure Teralys has a website, and today’s press release ends with “For further information: The telephone number provided below is for the exclusive use of journalists and other media representatives: Josée Lagacé, (514) 850-4835.”  But not if you’re a journalist running a VC fund.  Or a VC.  In other words, don’t call them, they’ll call you.

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Flow-Through Shares for Cleantech and Biotech in Canada

800px-SieveRick Sutin, a partner at Ogilvy Renault (my home-away-from-home), has a post up at Cleantech in Canada singing the praises of flow-through shares.

So far, the flow-through program in Canada has been available (mainly) to resource exploration and development companies, but we have been arguing for a while that the program would be ideal for Cleantech and Biotech as well.

Why? See if any of these points sound familiar to a Biotech audience:

  1. Success comes from discovery and development programs, and relies on large amounts of high risk venture capital where revenues are uncertain and remote; flow-through shares filled the gap for resource exploration by providing venture capital at premium valuations through the public markets.
  2. Flow-through shares have made Canada’s capital markets the recognized global leader in resource finance and home to more resource companies than any other country in the world. The Canadian industry now develops and attracts the top resource management talent in the world.
  3. Government participates not by picking potential winners, but by giving private sector investors a tax incentive to make those choices and take those risks.

Here’s how flow-through shares work:

A company that issues flow-through shares must spend the proceeds on qualifying expenditures in Canada.  The expenditures are then renounced by the issuer to its investors, who can treat the expenditures as if they made them themselves.

How does it look from government’s perspective?

The government incurs an expense by foregoing tax that would otherwise be paid by the investors. However, the government recoups tax revenues from the recipients of the expenditures that would otherwise not have been made without this program and on the subsequent sale of shares, as the tax cost of shares is reduced to zero in the hands of the investors.

This is one of the few government programs that has successfully run for 20 years, contributing to Canada’s dominance in a significant sector without any problems or abuse.

A good deal all around.

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Canada — and MaRS — Draw Notice on List of Biotechnology Clusters

world_map_2002A report at Genetic Engineering and Biotechnology News, picked up today by FierceBiotech, discusses emerging biotechnology clusters.  It’s worth excerpting the whole bit on Canada:

Both Toronto and Vancouver have good, small companies, but they’re struggling for capital. They have the benefit of government support and strong universities, particularly the University of Toronto, the University of Guelph, and the University of British Columbia. Entrepreneurship skills need to be honed, however.

In the heart of Toronto, the MaRS Center incubates a host of companies within about a mile of five teaching hospitals, the University of Toronto, the provincial parliament, and the financial district. The local government takes a close interest in the Center’s success, and several promising research projects are moving toward commercialization.

Vancouver, on Canada’s west coast, consistently ranks as a fast-growing cluster, attracting more than 90 companies, some with late-stage trials. The University of British Columbia has an active tech-transfer department that has spun out several companies.

The report also discusses innovative activity in China and India, among others, that fits with the trend we have observed.  Read the whole report here.

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The Patent Reform Act of 2009: Absent Inequitable Conduct Provisions Help Biotech

The Patent Reform Act of 2009 was introduced by Senator Patrick Leahy (D-VT) Chairman of the Senate Judiciary Committee. The bill includes Senator Orrin Hatch (R-UT) as a co-sponsor. Notably missing from the list of co-sponsors is Senator Arlen Specter (R-PA), Ranking Republican on the Judiciary Committee.

Provisions relating to inequitable conduct have been removed from the previous version introduced last year. Inequitable conduct is a critical provision for the larger pharmaceutical companies. Provisions relating to apportionment of damages are of secondary importance to large pharma, but critical to biotech. The biotech industry does not favor the current damages language. The fact that inequitable conduct provisions are missing means that large pharma will focus its opposition to the patent reform bill on damages provisions.

The text of the Senate bill is not up on Thomas yet, but you can find the full text as introduced here (pdf).  See also Dennis’ Patently-O post with summary and commentary.

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Sibelius for HHS. Sibelius for Biotech?

The official announcement came today that Sibelius has accepted the HHS nomination.  Dani posted last week about Sibelius’ support for the Kansas Economic Growth Act, which provided $500 million in support for biotechnology in the state.  Also of note is this story (scroll down to the 3rd headline) about her Agriculture Secretary, Adrian Polansky, who also appears popular in the biotech community:

He received the 2007 BIO State Executive of the Year Award by the Biotechnology Industry Organization.  Polansky along with KTEC, and the Junction City/Geary County Economic Development Council, received the 2007 “Governor’s Cup in the Biosciences” the state’s top award for collaboration in bioscience industry development.

Since Polansky is chairman of the National Association of State Departments of Agriculture biotechnology task force and is an ex officio member of the USDA Advisory Committee on Biotechnology and 21st Century Agriculture, I guess he and Sibelius will run into each other from time to time in DC.

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Sibelius and Biotech

Yes, we have all heard the rumors about Kansas Governor Kathleen Sibelius as the next HHS Secretary. How will the potential Secretary Sibelus impact the biotechnology industry? In her first term, Sibelius signed into law the Kansas Economic Growth Act, which was seen as a way to boost Kansas’ biotechnology industry. The Act allocated $500 million in research and investment capital over the next 10 years.

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