Press Release: Funding remains crucial for Canadian biotech industry
Funding remains crucial for Canadian biotech industry OTTAWA, July 19 - Canadian life science and biotechnology companies continue to demonstrate the importance of funding for the biotech industry in Canada. According to the 2007 Canadian Life Sciences Industry Forecast by PricewaterhouseCoopers (PwC) created in collaboration with BIOTECanada, securing financing is crucial to the success of Canadian companies. Of the biotech companies surveyed, the majority are looking to raise more than $10 million in their next round of financing and more then 40% intend to seek more than $20 million. Access to capital was ranked as the number one barrier to successful commercialization of intellectual property by 78% of those surveyed. "Biotech companies require a significant amount of capital to take their ideas through the regulatory and development process to turn them into commercial products," says John DeLucchi, National Leader, Life Sciences Group of PwC. "The importance of funding will continue to be a key component to a successful Canadian biotech industry." Achieving financial success is still years away for most Canadian biotech companies. However, 57% of respondents generate revenues and 68% expect profits within five years. This is a positive trend compared to 2006 survey results, where only 46% of companies generated revenues and 60% expected profits within five years. Over two-thirds of respondents identified the creation of favourable tax incentives as the most important action the government can take to improve the industry's standing in the global market. Improving the speed of the regulatory process and providing research grants for companies were also identified as ways the government can improve Canada's global market standing. "Biotechnology development is maturing in Canada and it is clear the federal government has a pivotal role to play in securing this industry," says Peter Brenders, President and CEO of BIOTECanada. "We need to continue to improve the competitiveness of our Canadian biotech companies in the global market." The 2007 survey also showed respondents are increasingly expecting their funding to come from strategic partners, as opposed to venture capital sources. More than 30% identified their next source of funding to come from strategic partners compared to only 18% last year. The survey further found that after access to capital, high-level human resources issues were of great importance. Respondents cited the need to access an experienced talent pool as one of their critical success factors. They also identified attaining and attracting key employees as one of their most challenging issue along with the availability of experienced senior management as a barrier to successful commercialization of intellectual property. DeLucchi notes, "Recruiting experienced senior management in the biotech space is probably the most important action that the industry can take to improve Canada's ability to compete globally." The results of this survey are based on responses from 92 individuals who completed the Forecast survey. Respondents included a national cross-section of public and private emerging life science companies, senior management of providers of capital to the industry as well as senior public officials involved with research institutes and government. About PricewaterhouseCoopers PricewaterhouseCoopers (www.pwc.com) provides industry-focused assurance, tax and advisory services to build public trust and enhance value for its clients and their stakeholders. More than 140,000 people in 149 countries across our network share their thinking, experience and solutions to develop fresh perspectives and practical advice. Now celebrating 100 years of excellence in Canada, PricewaterhouseCoopers LLP (www.pwc.com/ca) and its related entities have more than 4,700 partners and staff in offices across the country. "PricewaterhouseCoopers" refers to PricewaterhouseCoopers LLP, an Ontario limited liability partnership, or, as the context requires, the PricewaterhouseCoopers global network or other member firms of the network, each of which is a separate and independent legal entity. About BIOTECanada BIOTECanada (www.biotech.ca) is dedicated to the sustainable commercial development of biotechnology innovation in Canada. It is the national industry-funded association, with almost 200 member companies representing the broad spectrum of biotech constituents including emerging and established companies in the health, agricultural, and industrial sectors, as well as academic and research institutions and other related organizations.