The public companies in the Canadian healthcare sector endured the first quarter of 2010 with a modest infusion of capital. Excluding the largest financing, $86.3 million by profitable Extendicare, the sector raised $149.7 million. Based on historical financing trends, the sector needs more than $1 billion in annual financing to grow rather than just survive.
The events for the sector were largely positive, with a good mixture of regulatory and licensing news. The results of the three U.S. FDA regulatory decisions expected in Q1 were mixed: a product approval for Labopharm, a Complete Response letter with issues for IntelGenx (approval was not expected) and a delay for Theratechnologies, which had its FDA advisory committee meeting rescheduled to May 27.
Veterans of this sector remember the irrational exuberance and herd mentality of the biotech boom of 1999-2001. It has been ten years since the NASDAQ biotech index reached its all-time high on March 7, 2000, followed three days later by the NASDAQ composite index. In our next review, we will look back at this phenomenon, including the performance of the Canadian biotech IPO class of 1999-2001.
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