Financing for Canadian biotechs was flat in 2012 and shows that companies must do more to attract investors, Ernst & Young reported today.
“The focus on efficiency continues to be a huge challenge for Canadian biotech companies in the current business environment,” said Mario Piccinin, partner at Ernst & Young, explaining that while total financing essentially remained flat in 2012 at US$733 million, venture funding was down by 60% to US$68 million.
B.C. biotech companies led the country with 37% of the total financing.
Ernst & Young’s annual report on biotech also revealed:
- there were no IPOs again in 2012;
- public companies’ R&D expenditures fell 12% in 2012 to US$405 million;
- revenues were essentially flat from 2011 at $619 million;
- the number of public companies in Canada decreased by 7% to 63;
- overall employment in the sector also fell by 5% in 2012; and
- companies in Quebec received 70% of total venture funding.
The report recommends that Canadian companies need to invest more to gather and show evidence of their worth.
“The other challenge is the move to outcomes-focused, evidence-driven health-care systems around the world,” said Piccinin. “Strategic and financial investors want evidence that will be compelling to the ultimate payers.”
