Potential Upside In Canadian Biotech
You may not have thought to look northward for biotech innovators, but Bloom Burton & Co. cofounder and President Brian Bloom can show you some truly hot Canadian companies with compelling skill sets and pipelines. In this interview with The Life Sciences Report, Bloom talks about his firm’s upcoming conference and presents a detailed picture of four very interesting companies that could return doubles, triples or more.
The Life Sciences Report: Does your firm perform any buyside activities, or are you strictly a sellside organization performing investment banking, advisory and research functions?
Brian Bloom: We offer a fully integrated platform of services that work together to capitalize, advise and grow extraordinary healthcare companies, and we operate almost exclusively in the Canadian space. We have many different services, including capital raising, merger and acquisition, advisory, equity research, scientific, clinical and medical consulting, company formation, which is a merchant banking function and, finally, direct investments.
We’ve brought this model to Canada. We may be unique in that we work not just with companies and investors, but we also perform advisory services to a lot of academic organizations in their work in starting up companies, and additionally with building companies from scratch.
TLSR: Your third annual Bloom Burton & Co. Healthcare Investor Conference is June 17–18. Do you have a theme for the conference?
BB: The theme is simply to find the best companies in Canada, where we have a universe of about 120–140 publicly listed companies, most of which are on the Toronto Stock Exchange (TSX) and some of which are also on NASDAQ. There are also hundreds of private life sciences companies here in Canada. We try to choose the best 45 or so companies to showcase to global investors who come to Toronto.
It’s a myth that there are lots of great companies and no capital. A lot of capital is out there, and partners like Bloom Burton & Co. can help curate a list of the highest quality companies. That is the purpose of this investor conference.
TLSR: With your proximity to the U.S., I’m wondering how much interest and support you get from Wall Street.
BB: The majority of our attendees are Canadian, but we have a lot of interest and attendance from healthcare specialist investors who travel from New York, Boston, San Francisco and Europe. We often reach out to, and have lead orders for our transactions from, American healthcare specialist investors, including venture capital, hedge funds and private equity investors or lenders. Historically, these firms drive most of our transactions, and it’s the Canadians who generally follow, because they don’t have that expertise in the life science sector.
Canada is interesting in that we have a long history of risk investing, or investing in small-cap companies. The world comes to Canada for mining, oil and gas, and other natural resource plays because we are the leaders in growth capital and risk capital in that sector. But, the United States—namely Boston, New York and San Francisco—is where the world goes for risk capital in life sciences.
TLSR: Because of their experience with resource investing, Canadian investors are not risk averse?
BB: Yes, but with a caveat. Biotechnology companies are incredibly risky investments. Canadians are very comfortable with risky investments, but have had a long history of losing lots of money in biotechnology because of their lack of expertise in the sector, or lack of understanding the nature and timing of the risks associated with investing in the sector. As you know, biotech is probably the riskiest sector to invest in. You either have to have a lot of expertise or be crazy to invest in biotechnology. From patent, to scientific, to clinical, to regulatory, to commercial and reimbursement, the risks are extraordinary, and there are only a few thousand investors across a couple of hundred funds in the world who do this kind of investing as specialists.