Equicom’s review of the Canadian healthcare sector in 2009 is titled ‘Survival, Success, and Surrender’. Most of the public companies we track focused on survival, a few were able to celebrate successes and some of our friends did not survive the year.
These public companies raised a total of approximately $654 million from equity and convertible debt financings despite a difficult financial environment in 2009, excluding large financings by Biovail and SXC Health Solutions. The healthcare environment has been particularly brutal for the pharmaceutical companies with FDA tightening safety requirements, legislators attacking them over pricing and marketing, and a patent cliff for their biggest products in clear sight. For the smaller companies, this created an opportunity for increased partnering and acquisition activity, which many Canadian companies are pursuing and some completed in 2009.
The average share price return in 2009 for a group of 32 larger Canadian healthcare companies was +100%, easily outperforming the TSX Composite Index, but investors’ perception of the sector may not match this performance. Good events outnumbered the bad events, but product failures make headlines whereas good data can get ignored.
The sector needs to catch the attention of investors in 2010 and their attention will be captured by positive events. Companies with revenues and earnings need to show continued growth in their quarterly results. Ongoing partnership discussions need to be turned into a couple partnerships with major pharmaceutical companies and large upfront payments, or turned into acquisitions. The sector could also use a little luck in 2010 - a few positive clinical and regulatory events early in the year would help attract the attention of risk-tolerant investors.
Read the full report here: http://bit.ly/7ieuu2
[...] a comprehensive look back at 2009 at the Canadian public healthcare sector. Here’s the link to the press release, which has the headline numbers and a link to the full report. If I use [...]