Province offers to help attract bio-tech capitalCompanies in B.C. often have to go abroad to fund commercialization of products
The B.C. government is considering ways to increase the flow of venture capital and talent into the province’s burgeoning biotechnology sector, Economic Development Minister Colin Hansen said Tuesday. Hansen, who is in Chicago for the industry’s annual global convention, BIO 2006, said he wants feedback on how the government can help B.C.’s biotech sector. “We are looking at everything from tax policy to what we can do to encourage venture capital.” Hansen said he is asking the industry “let us know what we need to do next to help the sector grow. . . . Industry has to lead and the government wants to be a strong supporting partner.” Hansen’s pledge came the same day Vancouver’s Xenon Pharmaceuticals Inc. announced completion of $31-million US in financing to support clinical development of the its products. Xenon is a privately held genetics-based drug development company. Its lead products — XEN401 for chronic and acute pain and XEN501 for atrial and ventricular fibrillation — are in pre-clinical studies. The financing, led by investment companies MX Associates LLP and LipoteRx Ltd., also brings clinical and regulatory experience to Xenon with Dr. Evan Stein, managing partner of LipoteRx joining the Xenon’s board of directors. The announcement typifies a trend in the biotech sector — the province turns out industryleading research but often firms have to look outside B.C. for venture capital and expertise to see products through commercialization. Hansen said there is a need for more money to foster the work that is being done by early stage companies here. Investment dollars are focusing more on the later stage, lower risk companies. “The industry is growing faster than the supply of capital at that early stage,” said Hansen. Hanson suggested incentives could be developed to close the gap that leaves earlier stage companies overlooked by venture capitalists. “The challenge is to f ind incentives that will direct capital to early stage companies,” Hansen said. Examples of government support for biotech, Hansen said, include changes to B.C.’s International Financial Activity Act earlier this year that broadened the activities qualifying for tax relief to include intellectual property. While he said tax policy changes have been successful in the past, he added the government is open to ideas. In terms of market capitalization, Hansen pointed out that B.C.’s biotech sector leads Canada with $7 billion, ahead of Ontario’s $6-billion market cap in biotech. Hansen said the provincial nominee program has helped bring talent from outside Canada to B.C.’s biotech sector, but cases such as Angiotech’s recent loss of an executive to a California biotech shows more is needed. In that case, Angiotech recruited a New York doctor and investment specialist only to have him leave for a California biotech after having to commute daily to Bellingham because his physician wife couldn’t pursue her career here. “We want to make sure it doesn’t happen again,” Hansen said of the difficulties that faced Todd Young, who was vicepresident of investor relations and communications for Angiotech. Hansen said he has had “some excellent discussions,” with Canada’s new immigration minister who he said has shown a “willingness to look at some of the changes we need.” “We may not be able to capture the one couple that has left now but hopefully we can make it a lot easier for those who follow,” he said. gshaw@png.canwest.com |
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