The Business of Biotech

Access to capital remains the number one priority for emerging biotechnology firms. BIOTECanada works to increase access to financing by encouraging regulatory and legislative changes that create incentives for investors to put their money into this innovative sector.

Canadian Financing Facts

• It takes 10-15 years, and approximately 1.5 billion dollars to commercialise a biotechnology product.
  
• Venture capital, the primary source of fundraising for Canada's emerging biotechs, has dropped 75% since the beginning 2007.
  
• Eighty per cent of Canadian biotechnology companies are privately owned. The majority of the sector is made up of SMEs:  50 per cent of biotechnology companies have less than 20 employees, and 80 per cent have less than 100 employees.
• As of January 2010, 70% of Canadian biotechs reported they had close to one year of cash on hand.
• The biotechnology sector is typically more sensitive to market movements than other sectors. Canada's publicly-traded biotechs are still recovering from the global economic downturn - as of April 1, 2010, the market capitalisation of Canada's publicly-traded biotechs is 15% lower than pre-market crash levels. 

BIOTECanada is currently working on several initiatives to boost the financing landscape for emerging biotechnology firms. One initiative BIOTECanada continues to advocate for is removal of the Canadian-Controlled Private Corporation (CCPC) restriction from the Scientific Research and Experimental Development (SR&ED) tax credit program. Learn more here.

Financing News

REMOVAL OF SECTION 116 - OPENS DOOR TO FLOW OF FOREIGN CAPITAL FOR BIOTECH

For the biotechnology industry, the big “win” in this year's federal budget was the removal of section 116(Canada-US Tax Treaty). A long-time priority and advocacy project for BIOTECanada, the removal of the section will mean investors such as non-resident venture capital funds will no longer need to file Canadian tax returns on top of their US tax returns, or fill out section 116 certificates upon exit. BIOTECanada anticipates this change will open the doors for investment into Canadian biotechnology firms, and signals an “open for business” attitude by our government. Read our press release