Canadian Biotechnology Industry Poised for Growth

Strategic Insights -

As Canada's fledgling biotechnology business enters a crucial phase of development, industry leaders are pinning their hopes on the success of a single company that can serve as a model for others to follow. According to Steven Burrill, a consultant and co-author of Ernst & Young's annual biotechnology survey, the country's biotech industry is on the cusp of a growth spurt, driven by the emergence of a commercially viable success story. While Burrill declined to name a specific company, he highlighted Quadra Logic Technologies Inc.'s light-activated cancer treatment as a promising example of Canadian innovation.

Key Takeaways:

  • The Canadian biotechnology industry is expected to grow significantly, with the number of companies potentially rising to 200 within a few years.
  • The industry's commercial potential is being hindered by a lack of new sources of start-up and development capital.
  • Quadra Logic Technologies Inc.'s light-activated cancer treatment is a promising example of Canadian innovation in the biotechnology sector.
  • Ernst & Young's annual biotechnology survey, of which Burrill is co-author, highlights the industry's potential for commercial success.
  • The North American biotechnology industry is not headed for sweeping consolidation, according to Burrill.
  • The industry's growth will be driven by the emergence of a commercially viable success story in Canada.

Statistics:

  • The number of Canadian biotechnology companies is currently 121, and is expected to rise to 200 within a few years.
  • The total revenues of U.S. biotechnology firms increased by 12% in 1994 to $11.2-billion (U.S.).
  • Product sales grew 10% to $7.7-billion, and these companies reported a total cash flow of $805-million (U.S.), compared with a deficit of $411-million a year earlier.
  • The top 10 biotechnology products accounted for $4.3-billion of total product sales in 1993.
  • The U.S. biotechnology industry is expected to report revenues of roughly $50-billion by the year 2000, up from $11-billion in 1993.

Sources:

  • "Reform, Restructure and Renewal" - Ernst & Young's 1995 biotechnology report
  • Ernst & Young's annual biotechnology survey
  • The Globe and Mail, October 27, 1995, Page A1