Canadian biotechs resilient – but financing flat at $US733m for 2012
Despite powerful science and great talent, financing for Canadian biotechs was flat in 2012. That means companies must boost their focus on efficiency and results if they hope to attract new investment, according to results from Ernst & Young’s 27th annual biotech industry report.
“The focus on efficiency continues to be a huge challenge for Canadian biotech companies in the current business environment,” says Mario Piccinin, partner at EY. “While total financing essentially remained flat in 2012 at $US733m, venture funding was down by 60% to $US68m.”
Ernst & Young’s Beyond borders: matters of evidence report reveals that despite a clear recognition of the importance of demonstrating value, many biotech companies are investing relatively little to gather the sort of evidence that will be critical to their success.
Piccinin explains: “The other challenge is the move to outcomes-focused, evidence-driven health-care systems around the world. Strategic and financial investors want evidence that will be compelling to the ultimate payers. Canadian biotech companies need to address this challenge or they’ll continue to struggle for financing.”
Other Canadian highlights from the global report include:
- 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 US$619 million.
- The number of public companies in Canada decreased by 7% to 63 companies.
- Overall employment in the sector also fell by 5% in 2012.
- Companies in Quebec received 70% of total venture funding.
- The total breakdown by province is as follows:
- British Columbia: 37% of total financing, with US$270 million
- Ontario: 30% of total financing, with US$219 million
- Quebec: 23% of total financing, with US$169 million
- Alberta: 6% of total financing, with US$47 million
- Other provinces: 4% of total financing, with US$28 million
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