MONTREAL, June 19, 2012 /CNW Telbec/ - The Canadian biotech industry's financial performance was down again in 2011, but a surge in positive clinical news stimulated the sector nonetheless, generating a 53% increase in financing which is a testament to the quality of Canadian science, Ernst & Young says today in a new report.
"The Canadian biotech sector responded with cost-cutting measures and improved their overall business practices in the wake of the 2008 crisis," says Paul Karamanoukian, National Life Sciences Leader and Partner at Ernst & Young. "As a result, the stronger companies were able to weather the storm and do more with less, as efficiency is the name of the game in life science world of today!"
In 2011, the Canadian biotechnology industry raised slightly more than US$740 million, an increase of US$257 million compared to 2010. Public companies raised US$574 million, a US$178 million increase over 2010.
In 2011, 15 public companies raised 80% of the total public financings, which is a clear improvement over 2010, when most of the public company financings went to only eight companies. "There are more successful companies this year than last, and this is sending a positive signal to new potential investors," comments Karamanoukian.
As for private companies, they raised just under US$166 million, which represents a 91% increase over 2010.
According to Karamanoukian, preliminary reviews of the first quarter of 2012 show an upward trend. With the Canadian government, and some provinces, announcing stimulus programs, the sector could see a real turnaround. "We're also seeing some of the major pharmaceutical companies partnering with the public sector to create investment funds that should result in further increases in investments, which demonstrates the industries trust in our science."
The province of Quebec is now leading the pack in both total public company financings and venture capital financings, surpassing the 2010 leader, British Colombia. Manitoba and Nova Scotia are also emerging as players in the sector. The total public and private financing breakdown by province is as follows:
- Quebec: 50% of total financing, with US$372.6 million
- Ontario: 24% of total financing, with US$177.3 million
- BC: 15% of total financing, with US$112.2 million
- Alberta: 9% of total financing, with US$62.9 million
- Manitoba: 1% of total financing, with US$8.6 million
- Nova Scotia: 1% of total financing, with US$6.4 million
Other highlights of the report include the following:
- Once again in 2011 no IPOs.
- The number of public companies remained virtually flat in Canada at 71 companies. The overall revenues decreased 21% from 2010 to US$998 million.
- The total R&D expenditures fell 4% in 2011 to US$431 million.
- The overall employment in the sector also fell in 2011.
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