Canadian biotechs focus on efficiency

"The focus on efficiency continues
to be a huge challenge for Canadian biotech companies in the current business
environment," says Mario Piccinin, partner at Ernst & Young.
"While total financing remained flat in 2012 at $755 million, venture
funding was down by 60 per cent to $70 million."

Ernst & Young's report reveals that
despite a clear recognition of the importance of demonstrating value, many
biotech companies are investing relatively little to gather the sort of
evidence that will be critical to their success.

"The other challenge is the move
to outcomes-focused, evidence-driven health-care systems around the world," Piccinin
said. "Strategic and financial investors want evidence that will be compelling
to the ultimate payers. Canadian biotech companies need to address this
challenge or they'll continue to struggle for financing."

Other Canadian highlights from the report:

• No IPOs again in
  2012.
• Public companies'
  R&D expenditures fell 12 per cent in 2012 to $417 million.
• Revenues were essentially
  flat from 2011 at $638 million.
• The number of public
  companies in Canada decreased by seven per cent to 63 companies.
• Overall employment in
  the sector also fell by five per cent in 2012.
• Companies
  in Quebec received 70 per cent of total venture funding.

Total breakdown
by province:

• British Columbia: 37 per cent of total financing, with $278 million
• Ontario: 30 per cent of total financing, with $225 million.
• Quebec: 23 per cent of
  total financing, with $174 million.
• Alberta: Six per cent of total financing, with $48 million.
• Other provinces: Four per cent of total financing, with $29 million.