The Cross-Border Biotech Blog

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

Tag Archives: OETF

Ontario Emerging Technologies Fund (OETF) Shows Signs of Life (Sciences), Adds Biotech Investments and Investors

An announcement this morning from the OETF — Ontario’s (née) $250 million co-investment fund — shows positive signs for potential matching investments in the life sciences.

First, the OETF announced an investment in Natrix Separations. BDC wore the “Qualified Investor” hat on that one, but Natrix is in GrowthWorks’ Canadian Fund portfolio, so we know at least one life sciences VC has found a way to access the OETF funds.

Second, the OETF announced that Lumira Capital and CTI Life Sciences Fund are now Qualified Investors. Both have extensive life science portfolios (Lumira, CTI) and recent successful exits (Lumira: Resonant, Ception; CTI: TargeGen).

So, is this the tip of the biotech iceberg for the OETF? The level of disclosure required to qualify has been cited as a barrier to VC participation in OETF investments and some structural challenges remain for life science companies hoping to leverage the fund’s money; so it’s too soon to say. It sure is encouraging to discover that these challenges aren’t prohibitive. Stay tuned…

Bookmark and Share

First Two OETF Investments: ecobee and Bering Media

Ontario’s $250 million Emerging Technologies Fund has closed its first two investments, participating in a $6.73 million round from smart grid company ecobee and a Series A round of undisclosed size from location-based ad company Bering Media.  I am proud to report that Ogilvy Renault, led by Senior Partner Jay Lefton, acted for ecobee in connection with its financing.

Interestingly, the portfolio companies page at OETF lists four “conditionally approved” investments, so perhaps we should stay tuned for two more announcements.

More tidbits: the Qualified Investors page now lists Celtic House (no OETF deal yet?), JLA Ventures (the QI for the ecobee deal), Tech Capital (the QI for the Bering deal and an ecobee investor) and XPV Capital (no OETF deal yet?).

The OETF mandate includes (1) clean technology, (2) life sciences and advanced health technologies, and (3) digital media and information and communications, with (1) and (3) covered by these first two deals.  Look forward to seeing (and working on) some life sciences deals from the OETF.

Bookmark and Share

OETF Awards Service Provider Contracts to Northwater and Covington

The RFP process for the Ontario Emerging Technologies Fund administrator has ended, with Northwater Capital and Covington Capital having been selected.

According to the news item from OETF,

“Northwater Capital Management Inc. will review applications to become a qualified investor.  Covington Capital Corporation will review applications from qualified co-investors in relation to qualified investments and will provide ongoing administration and monitoring of co-investments under the Fund.”

Don’t contact the service providers, though:

“All OETF-related decisions will be made by OCGC and all inquiries regarding the OETF should continue to be directed to OCGC.”

This is the last piece of the OETF puzzle, and in his recent presentation at the OBIO-MRI panel, John Marshall noted that they have already started looking at investors and deals.

OBIO Panel Presents OETF and BIP Information

The Ontario Bioscience Industry Organization (OBIO) and the Ministry of Research and Innovation (MRI) co-hosted an event a few days ago entitled: “Funding Opportunities in 2009-2010 for Bioscience Companies: What CEO’s Need to Know About Ontario’s ETF and BIP Programs.”

The speakers were:

  • Chair: Kevin French, Senior Act. Manager, RBC;
  • Industry:
    • Rocky Ganske (President & CEO, Axela),
    • Peter Pekos (President & CEO, Dalton Pharmaceuticals),
    • Tom Wellner (President & CEO, Therapure Biopharma);
  • Investors:
    • Rob Koturbash (Managing Director, Maple Leaf Angels)
    • Steve Ottaway (Managing Director, GMP Securities),
    • Peter van der Velden (CEO, Lumira Capital);
  • Government:
    • John Marshall (Director, MRI, responsible for OETF)
    • Ryan Lock (Acting Director, MRI, responsible for BIP)

Lots of great information on funding opportunities, and luckily, the whole thing is archived (here) online.  To access the presentation, enter “OBIO” when prompted.

Q3 Is Looking Up for Biotech: Emdeon, Cumberland, Domain, LOM BioQuest, OETF

light at the end of the tunnel smallThis week has seen a continued upswing for biotech and other health industry companies in the U.S. (with two IPOs) and in Canada (with great VC news and the pending appointment of an administrator for the Ontario Emerging Technologies Fund):

In the U.S.

Here in Canada

In the pipeline

With personalized medicine seeing increasing validation as a clinical strategy, genomics technology will be key.  News this week from Helicos Biosciences that an individual’s complete genome was sequenced in one month for just $50k in consumables is an important marker (har) on the road to regular full-genome scans as part of our medical toolkit.

Share Button

Ontario’s $250 million Emerging Technology Fund Launches!

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.

Bookmark and Share

Ontario Emerging Technologies Fund: Q&A From MRI Briefing

Ontario LogoThe questions and answers from last Friday’s MRI information session have been posted on MERX.  Here’s the link to the whole thing (if you have MERX access), but I’ll save you some time:

  • There are two parts to the bid — one for evaluating Qualified Investors and one for evaluating Qualified Investments.  The same bidder might be selected for both; but there will be a maximum of one bidder selected for each Part.
  • Avoiding conflicts of interest means …  still can’t tell, actually.  The only thing we can tell for sure is that if you win the bid, you can’t be a Qualified Investor or bring in a Qualified Investment.  Which leaves who, exactly?
  • Lots of “no”s for the bidders: no indemnification, no inflation-indexed fees, no upside participation…
  • Foreign funds can be Qualified Investors.
  • Investee companies will be required to have and maintain an “Ontario footprint.”  Shoe size TBD.

Here’s an interesting one:

Q105. How would the ministry deal with exit events that may go against Ontario’s interests? What triggers the assessment?
A105. As an investor, Ontario will decide on how to deal with exit events taking into consideration the recommendation of the Proponent, the interest of Ontario and the interest of all other stakeholders.

In other words, we have no idea.  Let’s cross that bridge when we come to it.  Cheers!

Bookmark and Share

Follow

Get every new post delivered to your Inbox.

Join 129 other followers