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

Tag Archives: Ontario Emerging Technologies Fund

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…

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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.

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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.

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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.

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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!

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Ontario Emerging Technologies Fund RFP: Excerpts from MRI Presentation

A couple of weeks ago, Ontario’s Ministry of Research and Innovation put out an RFP for the new $250 million Emerging Technologies Fund, looking for a third party to evaluate co-investor and investment applications, and to administer and monitor investments for the fund.

Last Friday, they held a briefing for interested parties where they presented an overview of the ETF and of the RFP.  Here are the interesting bits:

Also, note that the deadline for addenda was extended. MRI can now publish addenda until June 18th, but bids are still due the 24th.

In order for your bid not to be disqualified, you have to get the RFP and apply through the tender system, MERX. It’s a ton of fun, plus you get access to the whole RFP and further updates, and can check out who’s been checking it out, too.

MRI RFP ISO for Emerging Technology Fun(d)

Ontario LogoOntario’s Ministry of Research and Innovation has put out an RFP for the new $250 million Emerging Technologies Fund.

They are looking for someone to evaluate co-investor and investment applications, and to administer and monitor investments for the fund.

Here’s the blurb from the RFP Abstract:

The OETF is a new $250 million program announced as part of Ontario’s 2009 Budget that would invest $250 million dollars over five years together with qualified venture capital funds and other private sector investors. This initiative is designed to help Ontario respond to the challenges emerging technology companies are experiencing in raising venture capital and other private equity. The Fund will focus on clean technologies, health and life sciences, and information and communication technologies, including digital media. The goal of the fund is to co-invest in high growth, innovative Ontario technology companies, with OETF as a co-investor. The RFP will enable MRI to retain the necessary external experts to support MRI in evaluating co-investors and co-investments, and in administering and monitoring these investments.

The final date for receiving written questions is June 10, 2009, 4:00 p.m.

Final Addenda will be issued by June 16, 2009, 4:00 p.m.

Optional Proponents Briefing will be held on June 12, 2009, 10:00 a.m.

Proposals must be received before 2:00 p.m. on June 24, 2009.

Read the full RFP at MERX.

BIO 2009: Ontario Premier’s Breakfast

BIO 2009The speeches (s-peach-es?) just finished this morning at the Ontario Premier’s breakfast.

Minister of Research and Innovation John Wilkinson announced that Ontario has recently completed 2 new BIP investments:

Ontario’s Premier — Dalton McGuinty, winner of BIO’s second annual International Leadership Award — spoke next, highlighting the Ontario Innovation Agenda, including BIP, business tax reductions and recent funding in the Emerging Technologies Fund and the new $100 million for genomics research.

Dr. Nagy also spoke, emphasizing the $100 million of new funding and the value of a peer group of 95 P.I.’s in Ontario working on stem cells and regenerative medicine. Current work focuses on cell type switching without regression to pluripotency.

On to the omelet…

P.S.  First time here at the Cross-Border Biotech Blog?  Welcome! Check out who we are, check out our Trends in 2009 series, or hit the search and navigation tools on your right and see if you see anything interesting.

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New Data in Canada: BIOTECanada-PwC 2009 Life Sciences Forecast

The BIOTECanada-PricewaterhouseCoopers 2009 Canadian Life Sciences Forecast was released today.

The Forecast was produced from data gathered in October and November 2008, so is (unsurprisingly) a bit bleak, but there are a few bright spots to be found:

  • Canadian companies are increasingly flexible about exit scenarios.  In the 2009 Forecast, 66% of firms looked to mergers (down from 80% in 2007), while 48% looked to co-development partnerships and 46% saw licensing or selling IP as their success strategy.
  • Some problems were reduced from levels reported in 2007:
    • Only 26% of respondents identified “attracting and retaining key employees” as one of the three most challenging issues, down from 39% in 2007;
    • In 2007, 33% of respondents identified “attracting a licensing or strategic partner” as most challenging, which was down to 22%  in 2009; and
    • 21% instead of 29% of respondents cited “managing the regulatory process.”
  • Finally, there was a 66% increase in the number of respondents who believed “protecting intellectual property” would be a top-three challenge, which is excellent news … at least for lawyers.

The predominant issue weighing on the minds of respondents was clearly access to capital:

  • Sixty-one percent of respondents ranked “increased Canadian venture capital” as critical to the industry; and
  • While the overall percentage of companies expecting to raise between $10 million and $100 million in their next round remained the same as it was in 2007, the percentage expecting between $10 and $25 million tripled while the percentage expecting betwen $25 and $100 million was cut nearly in half.

The really good news about this, though, is that since the survey was taken last Fall, over $1 billion in venture investment funding has been budgeted in Ontario and Québec, and the Ontario Venture Capital Fund has already made several commitments … some of which are bound to end up with biotech VCs, right? Right?? Stay tuned.

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Ontario Budget 2009: Initial Reactions are “Encouraging”

Generally positive reviews of Ontario’s 2009 budget are coming in from the innovation community:

TBI gives a shout-out to the Emerging Technologies Fund:

The Biotechnology Initiative (TBI) would like to credit Premier Dalton McGunity and Minister of Research and Innovation John Wilkinson for their quick response to the looming economic uncertainty by the creation of the Emerging Technologies Fund… The life sciences community in Ontario is greatly encouraged as a result of the creation of this Fund.

Rx&D is also “encouraged”:

Canada’s Research-Based Pharmaceutical Companies (Rx&D) is encouraged by initiatives in the Ontario Government’s 2009 budget designed to fuel innovation and growth in Ontario’s biopharmaceutical and life sciences industry…

“The support in the budget for research infrastructure, genomics, tax incentives for innovation and the increased funding for the Ministry of Research and Innovation demonstrate that the McGuinty Government is strengthening its commitment to make science and innovation a priority.” 

So is the Retail Venture Funds Association:

The McGuinty government has made encouraging policy initiatives that help bring innovative high-tech applications to market more efficiently…  The Ontario Budget released today contained far-reaching initiatives that will help the province’s entrepreneurs, scientists and researchers develop and market new technology here instead of other jurisdictions.

The Ontario Medical Association is…

encouraged that the government is investing $2-billion into eHealth, which is playing an increasingly important role in improving patient safety and efficiency of our health care system. Electronic Medical Records (EMRs) have had a tremendous impact on patient safety, continuity of care, and quality of care. To date, over 3,000 physicians have made the transition to EMRs and by the end of 2009, over 4 million patients will have an electronic health record.

Did I miss any?  Are you encouraged too?  Let us know in the comments

Other: 

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$250 million Ontario Emerging Technologies Fund Seen, Raised by $825 million Quebec Venture Capital Fund

Ontario announced the $250 million Emerging Technologies Fund yesterday … pretty much exactly what Monday’s letter to McGuinty from the CVCA requested. That has got to be, by the way, either:

  1. the world’s first psychic government relations campaign, or
  2. the world’s fastest government stimulus.

Not to be out-done, the Québec budget today included an $825 million venture capital fund.  The government is teaming up with the Fonds de solidarité FTQ (english), the investing arm of the province’s labour federation, and the Caisse de dépôt et placement du Québec (english).

It will be interesting to see whether VC funds who receive OVCF money will also be eligible for the ETF matching.  The Ministry says that full guidelines will be posted on the MRI web site before the end of June 2009.

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