The Cross-Border Biotech Blog

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

Tag Archives: Business Development Bank of Canada

Monday Biotech Deal Review: June 20, 2011

Welcome to your Monday Biotech Deal Review for June 20, 2011.  Notable transactions from the previous week included the public offering of units by Resverlogix, as well as investments by HTX and the Business Development Bank of Canada in each of Milestone Pharmaceuticals  and Profound Medical Inc.  Read on to learn more. Read more of this post

$50 million to BDC for Ontario Tech Investments, Will “Collaborate” With Ontario Venture Capital Fund

The Federal Economic Development Agency for Southern Ontario (FedDev Ontario) is providing $50 million to BDC: $35 million for direct investments in “early-stage firms in Southern Ontario” and $15 million for LP investments in VC funds “focused on Ontario-based opportunities.”

Rather than relying [entirely?] on internal BDC resources, “as part of its decision-making process, the BDC will collaborate with the Ontario Venture Capital Fund.” 

Interesting, the $35 million of new BDC direct investment money will be almost double the OVCF direct investment money, since the OVCF is down to under $19 million for direct investments.

H/T to TechFinance.ca via @startupnorth, @markmcqueen.

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New Data Shows 70% of Canada’s Biotech Companies Have Under 12 Months’ Cash. BIOTECanada’s New Ask: Government Loans.

Canadian moneyA Canwest story today highlights new BIOTECanada data showing 70% of survey respondents have under 1 year of cash, up from 50% in January.  FierceBiotech picked it up as well, guaranteeing a full dose of international attention.  

Even though the remaining 30% of respondents likely include some with big recent successes — Bioniche, Allostera and Zymeworks – and some with creative approaches — ConjuChem, Neuromed, etc. — the top-line number is grim indeed.  Plus, as Kasia Majewski points out:

“Most firms have found away to extend their cash, but they’ve done that by massive layoffs, by shutting done operations to the bare bones. So essentially the lights are on but there’s one guy home.”

Given that there has been no systemic cash infusion, it’s not surprising that the number of firms in trouble has gone up since January. 

On the other hand:

There is a bolus of fund-of-funds and direct capital waiting to be deployed, including:

Plus, Lumira Capital’s Q2 newsletter (pdf) points to the new BDC money, Alberta Investment Management Corp’s PE plans and the new Alberta Enterprise Corporation as potential additional sources of funding in the medium term.

BIOTECanada bottom line:

In the winter, the organization was focused on tax initiatives.  Yesterday, though, the focus was entirely on

“negotiations with Industry Canada to obtain a loan program for Canada’s biotech sector that can hold the industry over until capital markets rebound. … [Specifically,] government loans to be repaid after a two- year period at six per cent interest.”

Maybe it’s the new money looming on the horizon, or the seeming lack of traction for the tax policy asks, but the focus has definitely shifted.

My bottom line:

Even the new loan program advocated by BIOTECanada will not help if the other government funding doesn’t make it to biotech companies and VCs. We’ve been keeping an OVCF scoreboard that still shows a goose-egg for biotech investments.  It may be early days for these new capital sources, but the hour is late for Canadian biotech companies.

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More New Canadian Tech VC Funding

BDC LogoThe Business Development Bank of Canada (BDC) is putting $75 million, allocated in the Federal 2008 budget, into the new Tandem Expansion Fund. The Fund expects a first close of $300 million this summer, and will invest in “Canadian technology growth companies.” At the helm are Charles Sirois and Brent Belzberg. 

More details about the team and the fund after the jump…

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