Access to capital remains the number one priority for emerging biotechnology firms. BIOTECanada works to increase access to financing by encouraging regulatory and legislative changes that create incentives for investors to put their money into this innovative sector.

Financing Facts

• It takes 10-15 years, and approximately 1.5 billion dollars to commercialise a biotechnology product.
  
• Eighty per cent of Canadian biotechnology companies are privately owned. The majority of the sector is made up of SMEs:  50 per cent of biotechnology companies have less than 20 employees, and 80 per cent have less than 100 employees.
• The biotechnology sector is typically more sensitive to market movements than other sectors. The top 25 publicly-traded biotechs in Canada have outpaced the TSX/S&P index since the global economic downturn begun.
  
• From 2000-2010, U.S. venture returns in the biotech industry outperformed returns in the information technology industry by more than 5x (Booth & Salehizadeh, 2010).
  
  

Current Initiatives

BIOTECanada is currently working on several initiatives to boost the financing landscape for emerging biotechnology firms.

Scientific Research and Experimental Development (SR&ED) Tax Credit Program

One initiative BIOTECanada continues to advocate for is removal of the Canadian-Controlled Private Corporation (CCPC) restriction from the Scientific Research and Experimental Development (SR&ED) tax credit program. Learn more here.

Sustainable Capital Formation: Flow-through Shares

As part of our National Advocacy Day in Ottawa, BIOTECanada members brought forward the issue of flow-through shares for the biotechnology industry.  The following documents and links provide information on this issue:

• White Paper on Flow-through Shares for the Biotechnology Industry
• Supplement Materials to the White Paper on Flow-through Shares
• BUILDING LONG TERM SUSTAINABILITY FOR CANADIAN BIOTECH:  FLOW-THROUGH SHARES
• PriceWaterhouseCoopers Report:  Economic Impact of Flow-Through Shares in Biotechnology Industry
• Frequently asked questions: Flow-through shares

Financing News

REMOVAL OF SECTION 116 - OPENS DOOR TO FLOW OF FOREIGN CAPITAL FOR BIOTECH

For the biotechnology industry, the big “win” in this year's federal budget was the removal of section 116(Canada-US Tax Treaty). A long-time priority and advocacy project for BIOTECanada, the removal of the section will mean investors such as non-resident venture capital funds will no longer need to file Canadian tax returns on top of their US tax returns, or fill out section 116 certificates upon exit. BIOTECanada anticipates this change will open the doors for investment into Canadian biotechnology firms, and signals an “open for business” attitude by our government. Read our press release