Market analysts believed that the Canadian biotech industry will be an important driver of the country’s economy, particularly in introducing more jobs and fueling the flow of big investments into the country. This is because most of Canada’s biotech players are startups working toward expansion and diversification, aside, of course, from developing unique products that they can introduce to consumers.
By 2021, the Canadian biotech sector will see a 45 percent increase of startups that will employ 25 or more people, according to a 2018 survey conducted by Deloitte for BIOTECanada. This is going to be an increase of 25 percentage points compared to 20 percent in 2017. These job openings are also expected to be categorized as high paying jobs.
On the business side, Canadian biotech companies are predicted to raise capital from major firms. Specifically, 51 percent of the biotech startup founders who answered the Deloitte survey are expecting investments from institutional pharma, 41 percent are expecting from venture capitalists, 30 percent expect capital to be coming from public financing, and another 20 percent are expecting capital from angel investors.
“The survey results clearly demonstrate the industry is presently in a healthy growth mode. With great science, the right talent and sufficient investment, Canadian innovation can be developed and commercialized in Canada. Ultimately, if we are successful, Canada should be home to several globally commercial biotech companies which will deliver significant economic and social benefits for the country,” Andrew Casey, President, and CEO of BIOTECanada said in the report.
With this information, we list the top five Canadian biotech stocks which investors could consider for their portfolio for 2019.
Canopy Growth Corporation
Medical marijuana has long been legal in the country as well as other international markets. This fuels the growth of the cannabis biotech sector of which Canopy Growth has nabbed a strategic position ahead of the competition. Now, not only does it enjoy the expanding market for cannabis, but it is also riding the ebb of how the biotech sector is growing.
For instance, in September 2018, it partnered with CURE Pharmaceutical to exclusively licensed CUREfilm which is a multi-layer oral thin film designed to increase the bioavailability of compounds. This milestone is only one among similar ventures that Canopy Growth has pursued last year until the beginning of this year.
On Jan. 14, the company announced what could possibly be its most important milestone so far. It has been granted a license by New York State to produce and process hemp in the U.S. With this, the company will build U.S. based commercial operations within New York’s Hemp Industrial Park.
Similarly, with Canopy Growth, the Cronos Group has also obtained a strategic position in the booming cannabis biotech sector. It has also been trading on the U.S. stock exchange since February 2018.
In October 2018, it entered into a research agreement with Israel’s Technion Research and Development Foundation of the Technionto explore the use of cannabinoids and their role in regulating skin health and skin disorders.
But perhaps the biggest lure for investors is the C$2.4 billion equity investment which Cronos Group received from Altria which is one of the world’s largest producers and marketers of tobacco.
Aurinia Pharmaceuticals has gotten the attention of investors when it announced involvement in the development of voclosporin which is a candidate treatment for Lupus Nephritis and dry eye syndrome. Aurinia stocks spiked several instances in 2018 each time that the company announced progress with clinical trials for voclosporin.
On Jan. 22, the company announced positive results for its exploratory Phase 2 head-to-head study evaluating the efficacy, safety, and tolerability of voclosporin ophthalmic solution.
Another biotech stock that is rapidly becoming favorite among investors and market analysts is Bellus Health. The company is involved in developing a treatment for a chronic cough. In December last year, the company announced it received funding of about $35 million which it will use to advance the clinical development of BLU-5937 into Phase 2 study by mid-2019.
All eyes are on Zymeworks right now as it acquired different partnerships with Big Pharma that could amount to as much as $7.6 billion in total. The partnerships involved developments of treatments that could potentially target gastric, ovarian, and breast cancer tumors. Most recently, it received payment of $8 million from Eli Lilly and Company.
(Featured image by Swapan Photography via Shutterstock)