August 14, 2012
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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.
January 9, 2012
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The numbers have been crunched in preparation for the 2011 Canadian Healthcare Annual Review, which I co-author with Ross Marshall, Senior Vice President at The Equicom Group. Prior to its publication later this month, we are going to give you a look at some of the top-line numbers.
The biggest concern in the sector is financing, both in Canada and globally. Two groups of numbers are shown below for our universe of public Canadian healthcare companies (132 companies to start 2011) – total equity and convertible debt financings by the group, and financings by development stage companies only (shown in millions of dollars). The 2011 total for the development stage companies is about the same at it was for the prior two years but is less than half of the average raised in 2005-2007.
Another major concern for both companies and shareholders is share price performance. We monitor share prices of a group of companies which started 2011 with a share price of $0.10 or higher and also look at two sub-groups. There were 104 companies in this group to start 2011 but only 97 companies actively trading as healthcare companies at the end.
The Equicom 2011 Canadian Healthcare Annual Review will look more closely at these numbers and the events from 2011, and discuss the results of its recent investor survey.
August 23, 2011
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[Ed. This is the eleventh 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.]
As described in the prior post, the modern pharmaceutical industry has evolved from the patent medicine companies selling herb and alcohol combinations into an industry developing complex and personalized medicines such as gene and cell therapy. The first blockbuster drug, Tagamet (cimetidine), developed by Smith, Kline & French (SK&F) is a great base for a case study of various industry strategies. Read more of this post
August 2, 2011
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[Ed. This is the ninth 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.]
In addition to the private institutional VCs, there are the retail investors who are willing to take similar risks with both private and public companies. I will focus on Canadian retail investors in this post.
Retail investors who invest in private companies usually do so through a fund which offers tax incentives. I have discussed flow-through funds, which are not currently available to biotech companies, in a previous series of posts. Historically, the largest investment vehicle has been the LSIFs or labour-sponsored investment funds, which are now being referred to as RVC funds or retail venture capital funds. There are a number of fund managers and the tax incentives vary by province.
Read more of this post
July 20, 2011
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[Ed. This is the eighth 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.]
The world of healthcare VCs has changed dramatically in the two decades which I have spent in capital markets. VCs are impacted by changes in the broader capital markets, changes in healthcare capital markets and changes in the industries on which they focus. Read more of this post