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Tag Archives: Equicom

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 made a proposal to acquire Cephalon for US$73 per share in cash. This is just one example of trends which the larger, profitable pharmaceutical and biotechnology companies appear to have carried over from 2010 – growing the top line and product portfolios using acquisitions and growing the bottom line from rationalizing operations, including their R&D infrastructure.

The financing climate for Canadian public healthcare companies was unexpectedly strong in Q4 2010. Some of this strength appears to have carried over into Q1 2011, with gross proceeds of equity and convertible debt financings completed in Q1 totalling $208.2 million. The companies with financings over $10 million which were completed in Q1 2011 are:

  • $58.2 million – GLG LifeTech
  • $40.3 million – Paladin Labs
  • $21.5 million – Centric Health
  • $15.0 million – Novadaq Technologies
  • $14.5 million – Oncolytics Biotech (two warrant exercises)
  • $12.7 million – Bioniche Life Sciences (Canada/Australia offering)
  • $12.1 million – EnWave
  • $12.0 million – IntelliPharmaceutics

Two additional financings (MethylGene for $34.5 million and Medicago for $17.4 million) were announced in Q1 but did not close until April. The first three companies mentioned above are not development stage biotech, being either profitable (Paladin Labs, Centric Health) or focused on manufacturing and marketing (GLG LifeTech) and they account for 58% of the healthcare sector total. Outside of the deals mentioned above, there were 24 financings under $10 million with total proceeds of only $36.4 million, an average of about $1.5 million per financing. Fourteen of the financings were for $1 million or less.

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 million in 2010. This financing number does not include debt, warrant exercises, license fees and milestones, and government grants. When financings by larger profitable companies are subtracted from this amount, financings by development stage companies in 2010 totaled $529.7 million, slightly higher than the $498.2 million raised during 2009.

The Q4 total of $259.3 million was almost half of the total raised in 2010, providing some momentum going into 2011.

Current Data on the State of Biotech in Canada

Canadian moneyEquicom published a report recently that takes a comprehensive look back at 2009 at the Canadian public healthcare sector.  Here’s the link to the press release, which has the headline numbers and a link to the full report.  If I use “therapeutics” as a rough proxy for “biotech,” here’s where we stood at the end of 2009:

  • The average stock price change in public Canadian therapeutics companies was up 53% in 2009 — better than the TSX composite index (+31%) and the NASDAQ Biotechnology index (+16%) — despite some notable declines following clinical trial failures
  • Therapeutics companies raised $257.5 million, with $6.3 million of that coming in as convertible debt and the remainder as equity (mostly incentvized by warrants)
  • The study notes 10 licensing deals totaling $212 million in up-front payments with the potential for almost $2 billion in future milestone payments (among the 8 that disclosed financial information)

Read the whole thing (pdf), and you’ll see some reason for optimism.

In fact, BIOTECanada released some data from an updated survey this week that also shows increasing optimism in the sector heading into 2010.  Whereas the data in July showed 70% of companies with under 12 months’ cash, the new results show the converse percentage — over 70% of companies now report at least 12 months’ cash on hand.

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