Insights from Dr. Jason Field, President & CEO, Life Sciences Ontario
More than 60 of Canada’s hottest life sciences companies presented to a keen audience of US and international investors at the Bloom Burton conference held in Toronto May 2 to 3. There is no question in my mind that Canada is at a crucial inflection point for life sciences innovation in particular; how we handle this stage of growth will shape our sector’s economic success. As such, over the course of the conference, I noticed a few relevant themes emerging that deserve a closer look:
Differentiation in the medtech marketplace
Is the bar rising for entry into the medtech market? In Canada, medical technologies are generally seen as being similar to IT – with shorter development cycles – thus making for a more attractive investment. However, panelists suggested a more crowded marketplace is requiring companies to present technologies with increasingly substantial differentiation. This should reinforce the importance of innovative Ontario programs like MaRS EXCITE that focus on premarket assessment of early stage technologies.
The sustainability of home-grown therapeutics
By contrast, US investors are investing heavily in biopharma therapeutics. However, it was noted that Canada suffers from insufficient public investment to sustain growing therapeutic companies. This means that our home-grown companies seek listing in the US, sometimes bypassing the TSX/TSXV entirely.
The good news: we can fix this problem with some key changes in federal tax policy. Innovation investment tax incentives such as flow-through shares, already in place for the mining sector, would add much-needed risk capital to our sector.
The resilience of the specialty pharma industry
Over the course of the conference, there was a great deal of discussion on issues of pharmaceutical pricing that have become top of mind for the public due to Valeant and the Martin Shkreli scandal. There was a sense that the political scrutiny is likely short-term, and action from US lawmakers is either unlikely or will be limited to the few bad actors in the sector.
We recently witnessed a shift (both in Canada and internationally) in the specialty pharma business model, moving from value-added product portfolios to capital management; there will likely be a welcome transition back to a value-added model. This will be especially important in the Canadian context as companies like Valeant and others seek to demonstrate that they can provide value to patients and not just shareholders.
This column was republished with permission of the author and Life Sciences Ontario
About Life Sciences Ontario
Life Sciences Ontario is a member-driven organization that represents and promotes the province’s vibrant and diverse life sciences sector. LSO collaborates with governments, academia, industry, and other life science organizations in Ontario and across Canada to promote and encourage commercial success throughout this diverse sector.
Membership in Life Sciences Ontario includes individuals, students, emerging companies, investors, service providers, and companies with marketed products. The organization provides a wide range of networking and educational events, and operates a vibrant mentorship program that is helping to develop highly-skilled talent and build new business opportunities for the life sciences sector. LSO is an effective conduit for delivering policy options to governments, and is dedicated to promoting Ontario’s life sciences sector internationally.