The Canadian biotech industry's financial performance was down again in 2011, but a surge in positive clinical news stimulated the sector nonetheless, generating a 53% increase in financing, Ernst & Young said today in a new report.
Paul Karamanoukian, national life sciences leader and partner at Ernst & Young, said, "The Canadian biotech sector responded with cost-cutting measures and improved their overall business practices in the wake of the 2008 crisis.
"As a result, the stronger companies were able to weather the storm and do more with less, as efficiency is the name of the game in the life science world of today."
In 2011, the Canadian biotech industry raised slightly more than US$740 million, an increase of US$257 million compared with 2010. Public companies raised US$574 million, a US$178 million increase over 2010.
In 2011, 15 public companies raised 80% of the total public financings, a clear improvement over 2010, when most of the public company financings went to only eight companies.
"There are more successful companies this year than last," said Karamanoukian. "This is sending a positive signal to new potential investors."
Private companies raised just under US$166 million, representing a 91% increase over 2010.
According to Karamanoukian, preliminary reviews of 2012's first quarter show an upward trend. With the Canadian government, and some provinces, announcing stimulus programs, the sector could see a real turnaround.
"We're also seeing some of the major pharmaceutical companies partnering with the public sector to create investment funds that should result in further increases in investments, which demonstrates the industries trust in our science."
Quebec is now leading the pack in both total public company financings and venture capital financings, surpassing B.C., the 2010 leader.
The total public and private financing breakdown by province:
- Quebec: 50% (US$372.6 million);
- Ontario: 24% (US$177.3 million);
- B.C.: 15% (US$112.2 million);
- Alberta: 9% (US$62.9 million);
- Manitoba: 1% (US$8.6 million); and
- Nova Scotia: 1% (US$6.4 million).
