British Columbia is experiencing a second major renaissance in life sciences.
Twenty years ago, our province had several multibillion-dollar biotechnology companies that had developed some of the most innovative life-saving products globally, including the Taxus stent by Angiotech, Visudyne by QLT and Mozobil by Anormed. Today, none of these companies exist: some were acquired; others went out of business. But we are again growing. In 2019, B.C.’s biotech companies raised $700 million from the top four deals. This was followed by raising more than $1.5 billion in 2020, a record amount. So, how do we ensure this time that we position B.C as a global life sciences hub and not miss another opportunity?
Let’s not let history repeat itself.
B.C. was hit hard in the 2008 global recession. Our then-anchor companies were gone, so were our venture capitalists (VCs).
In the early 2000s, we also had several B.C.-based VCs supporting our ecosystem, including Ventures West, the BC Advantage Fund, GrowthWorks and BDC. For a period, very few companies in B.C. were able to raise the capital required for development due to the life science sector’s downturn and its lack of critical mass.
However, a critical difference between current and past biotech companies is that current successful organizations are mostly platform companies with broad pipelines and partnerships versus single product companies. As of 2019, this key sector employed more than 17,300 professionals earning relatively high wages and drew an increasing number of university graduates every year. Now, B.C.-based biotech companies can raise more money than ever before because they are developing cutting edge health-care solutions that are globally competitive.
This competitiveness has been highlighted recently. Last week, Vancouver-based Precision NanoSystems received $25 million from the federal government to build a new $50 million bio-manufacturing facility in Vancouver capable of producing 240 million RNA vaccine doses annually.
In January, Victoria-based Aurinia obtained FDA approval for the first oral treatment for lupus nephritis. Also, two Vancouver-based biotech companies, Acuitas and AbCellera, played a key role in the war against Covid-19 worldwide. Acuitas developed the novel and sophisticated delivery platform that was used for the mRNA-based vaccine developed by BioNTech and Pfizer.
AbCellera, in partnership with Eli Lilly, developed the first FDA-authorized novel antibody to treat Covid-19.
At the close of 2020, we saw AbCellera dominate the headlines with its record-shattering IPO with a current valuation of more than $10 billion. It joined two other B.C. biotech companies with valuations in the billions of dollars: Zymeworks and Aurinia.
Collectively, Zymeworks, AbCellera and Innovative Targeting Solutions (all anti-body discovery platform companies) have partnered with most of the global pharmaceutical companies.
The one issue in AbCellera’s financial success, however, is that there were no institutional Canadian VCs in the mix, which means that none of that significant investment will get pumped back into our economy. The financial and subsequent economic windfall for investors, outside of the company, remains firmly south of the border. Yes, there will be jobs and there will be opportunities to buy shares, but there was a fundamental loss to our community. We simply cannot afford to lose out to U.S. financiers anymore.
B.C. is a hub of innovation. We have developed firsts in many things. We punch well above our weight in innovation and economic impact compared with larger provinces like Ontario and Quebec. Canada also leads on the international stage, but we still lack anchor companies to truly lead. We have this tremendous, pioneering spirit. Our self-sustaining heritage serves us well, but we need to beat our own drum and encourage more institutional investors and large pharmaceutical companies to join our band.
B.C. is worthy of exceptional investment because we are a place of outstanding science and talent.
So where do we go from here? What happens when another AbCellera comes to market with a strong technology and possibly a competitive valuation? Do we have enough investors across our province (and our country) who will be ready, funded and able to invest? It is time for B.C. to value its innovation significantly more and put more capital to work to fund our innovative startups by ensuring pension funds and “funds of funds” continue to support our existing VCs, as well as new and emerging VC managers to enable funding for our world-class home-grown innovations. •
Ali Ardakani is the founder and managing director of Novateur Ventures, a global advisory and investment firm; the vice-chair of LifeSciences BC; and an associate at Creative Destruction Labs.