The Cross-Border Biotech Blog

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

Tag Archives: financing

Financings by Public Canadian Healthcare Companies in H1 2012

Public Canadian healthcare companies raised over $1 billion in equity and convertible debt financings in the first half of 2012. Before anybody wonders whether another biotech boom has suddenly appeared, a closer look at the details shows a different reality.

Large equity and convertible debt financings by profitable Canadian healthcare service companies in the first half of 2012 totaled $1,048 million. These are profitable companies, three of which do monthly distributions to shareholders. These companies fit the current risk profile of many investors, who are looking for profits, value and yield.

  • SXC Health Solutions                                      $541.8 million
  • Chartwell Seniors Housing REIT                $339.3 million (equity and convertible debt)
  • HealthLease Properties REIT                      $110.0 million (IPO)
  • Leisureworld Senior Care                             $  56.4 million

The total for the rest of the sector was about $288 million for equity and convertible debt deals closed in H1 2012. A financing over $10 million indicates that a company, especially one developing a novel therapeutic, may have a chance to plan its future, as opposed to just survive. This list includes:

  • YM BioSciences                            $80.5 M
  • Novadaq Technologies              $40.3 M
  • Oncolytics Biotech                      $21.3 M
  • Bioniche Life Sciences               $20.0 M (debt)
  • BELLUS Health                              $17.3 M (includes plan of arrangement proceeds)
  • Merus Labs                                     $17.3 M (equity plus debt)

Removing these large financings leaves about $127 million for the remaining over 100 companies in the sector to share. A small amount of additional funding came from exercise of warrants, government grants and milestone payments from partners.

The financing numbers in this post were compiled from the Q2 2012 Canadian Healthcare Review (pdf), co-authored by myself and Ross Marshall, Senior Vice President, The Equicom Group Inc., a wholly-owned subsidiary of TMX Group Inc. 

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 $200 million, how and where do small companies get that funding? While these companies should access all potential sources of funding including government agencies and disease associations, the major sources of funding will likely be capital markets and pharma partners. Read more of this post

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