Emerging Biotech Companies at Cantech 2017

The Cantech Investment Conference 2017 panel discussion, “Undervalued Emerging Biotech Companies Developing Breakthrough Therapies” moderated by Eden Rahim, Portfolio Manager of Next Edge Capital, put a spotlight on three emerging biotech companies: ProMIS Neurosciences (TSX:PMN), RepliCel Life Sciences (TSXV:RP,OTCQB:REPCF), and Critical Outcome Technologies (TSXV:COT,OTCQB:COTQF).
Rahim said that these emerging biotech companies were chosen because they are “not just developing a single therapeutic; they also have a technology that is side by side with that therapeutic.”
“Every entrepreneur and innovator in this room understands that there are much easier ways to make money than by spending a decade trying to develop a drug against Goliath competitors and then having uncertainty at the end of the road. But today, we have assembled a group of individuals that have actually pursued that path,” said Rahim.

Technology as an enabler in biotech

He started off by asking the panelists how they saw technology contain and advance the biotech products they are working on.
ProMIS Neurosciences Executive Chairman Eugene Williams shared that, “From an investor point of view, whatever return we get when we get bought by a big pharma, is going to be tenfold higher for people invested in us with that extremely efficient technology… and I think that’s just the beginning of what we will be seeing over the next decade as you alluded to… as more of that heavy duty computing informatics starts to work its way into biotech and allow us to get to products that look good for dramatically less money than we spent in the past.”
For R. Lee Buckler, CEO of RepliCel Life Sciences, manufacturing and bioprocessing are where he sees technology as an enabler. He says, “Now we have a wave of these cancer immunotherapies, all built largely on the autologous cell therapy products.”
Meanwhile, Critical Outcome Technologies CEO Alison Silva shared that 15 years ago, whole genome sequencing would have been possible for a bigger sum of money, citing that, “a machine was $1.7 million for a corporation to buy and about $3 million for a company to buy,” for a significantly longer time and, “with an error rate of 60 percent, which is useless.” She shared that last week at a health conference, Illumina (NASDAQ:ILMN) showed that whole genome sequencing can now be done for $100, and it would only take an hour.

Challenges in funding in Canada

Silva said that raising capital for a pre-clinical data stage biotech company in Canada has been tough. She says, “The level of interaction between US pharma and Canadian biotech needs to increase even if it’s at validation or early experimental phase where you’re just doing a co-developmental project.”
Buckler, however, cites that one of the big challenges in raising funds in US and Canada is in familiarity and exposure to biotech. He says, “One of the reasons it’s easy to raise money in Boston or La Joya is that everybody’s neighbor has two or three investments in biotech in healthcare.” He says that this commonality, “just does not exist in Canada. Few people have that depth of experience in Canada.” He also adds that there is no doubt, Canada is a very different market and addresses the need to raise the level of exposure to investing in biotech.
On the other hand, Williams believes that there is a lot of room for the Canadian market to evolve and said, “There are great deals to be had in Canada for institutional investors.” He added that the challenge in funding is a good problem to be had, “because it forces you as a company to make sure you are adding value to the people that matter the most, which is patients or their family members.”

A key takeaway for investors

In closing, when asked what sets them apart from their Goliath counterparts, Williams said small companies, “are there to innovate, focus, commitment, taking risks, innovating, trying new things–that’s what small companies do really well.”
Truly, these emerging biotech companies may be small, but as Rahim said as he introduced the panel, “the potential return to investors can be mind-boggling.”
 
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Securities Disclosure: I, Pia Rivera, hold no direct investment interest in any company mentioned in this article.