Recent mega initial public offerings by two Canadian biotechnology firms are shining the spotlight on the local biotech industry, according to the investment arm of the Business Development Bank of Canada (BDC).
Last week, Clementia Pharmaceuticals, a Montreal-based biopharmaceutical company successfully completed a US$120M million IPO on NASDAQ. Earlier in June, Vancouver’s Zymeworks Inc. raised $85 million through its own IPO.
“If more Canadian companies emulate Zymeworks and Clementia utilizing public markets to raise large rounds to finance growth, we believe that Canada can create strong, innovation based companies with an opportunity to be leaders in the industry, said Jérôme Nycz, executive vice-president, of BDC Capital. “As the most active venture capital investor in the country, we see these two companies as great models of what can be accomplished with visionary entrepreneurs complemented with a strong capital partner.”
Clementia is working on its major candidate product, Palovarotene, a retinoic acid gamma receptor agonist, for the treatment of progressive ossificant fibrodysplasia (FOP). FOP is s an ultra-rare bone formation disease. It causes muscle tissue and connective tissue such as tendons and ligaments to ossify. It forms bones outside the skeleton and constrains movement.
Zymeworks is a clinical stage biopharmaceutical company focused on developing multi functional biotherapeutics such as ZW25. ZW25 is based on the company’s proprietary Azymetric platform for IgG-like novel bispecific antibodies. Zymeworks is developing ZW25 as a best-in-class HER2-targeting antibody intended as a treatment option for patients with any solid tumor that expresses HER2.
The two companies are not the only Canadian biotech businesses raising large amounts of capital. Also in June, Repare Therapeutics, a Montréal developer of precision oncology drugs, raised US$86 million in Series A financing. And that only follows in the footsteps of Versant Venture’s recent partnership with Bayer which raised US225 million for the creation of the cell therapies startup, BlueRock Therapies.
Canadian companies, universities, and research centers have consistently produced groundbreaking innovation backed by strong science.
Renewed investment into the sector by BDC Capital with its $135M Healthcare Fund announced in 2013 and increased investment from other Canadian biotech focused funds is beginning to “catalyze great companies, strong investment syndicates and increased international capital into the sector,” according to the BDC investment arm.
Another factor attracting capital is the strong investment performance of the underlying companies offering the prospect of appealing investment returns for investors.
“The rapid growth of these two new life sciences companies is in line with our fund strategy of supporting the best performing Canadian companies with the technology and talent to assume leadership at the global level,” said Dion Madsen, senior managing partner of the BDC Capital Healthcare Fund. “Canada has an advantage when it comes to attracting talent in the life sciences industry because of the country’s emerging tech clusters; the groundwork for an outstanding life sciences industry in Canada has been laid and is now coming to fruition.