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Importance of Patient Capital in Life Sciences

The TSX Venture Exchange has a strong history of helping early-stage health and life sciences companies raise patient capital for research and development.

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TSX Venture Exchange (TSXV), a premier junior stock exchange, has a strong history of helping early-stage health and life sciences companies raise patient capital for research and development purposes. On average, life sciences companies that go public on TSXV raise approximately $2.3 million and have a market value of around $21 million. In 2023 alone, nine new life sciences companies went public on the TSX and TSXV. Life sciences companies have raised $13 billion of equity capital in the last five years and completed 588 financings. As of April 30, 2024, the Toronto Stock Exchange (TSX) and TSXV are home to 128 life sciences companies with a total market capitalization of $30.8 billion. 

This type of capital helps companies focus on staying true to the original vision of their founders with the support of investors willing to forgo immediate gains for more substantial, lasting returns. A two-tiered stock exchange model in Canada, with TSX for later-stage companies and TSXV for earlier-stage companies, allows emerging companies to access public markets earlier in their lifecycle. When they’re ready, companies can graduate from TSXV to TSX and then have the option to explore dual-listing on a major U.S. exchange.

Eupraxia Pharmaceuticals (TSX: EPRX), a clinical-stage biotechnology company dual-listed on TSX and NASDAQ, has been making waves in the industry with its focus on developing locally delivered, extended-release alternatives to currently approved drugs. Their innovative approach has not gone unnoticed, as their market capitalization has grown significantly over the past few months. This surge in value is a testament to the company’s commitment to developing cutting-edge solutions for needy patients. Eupraxia has raised CDN $112 million through four financings, demonstrating that investors are keen to back their vision. 

Two U.S.-based life sciences companies, Hamilton Thorne and Quipt Home Medical, have successfully graduated from the TSX Venture Exchange to the TSX in 2023, demonstrating remarkable growth. Hamilton Thorne (TSX: HTL), a leader in precision laser and imaging systems for reproductive technologies and developmental biology research, has raised CDN $35 million. As of April 2024, the company’s market cap has expanded by 5556% since its initial listing. The stock now attracts the attention of seven analysts. Quipt Home Medical (TSX: QIPT), which specializes in telehealth systems and automated distribution to improve home management of chronic illnesses, has raised CDN $155 million. Since its public listing, Quipt’s market cap has grown by 3401%. The company is also interlisted on the NasdaqCM and is followed by eight analysts.

In 2024, Satellos Biosciences Inc. and Nervgen Pharma Corp. were featured on the TSX Venture 50 list, which ranks the top performers over the last year. 

  1. NervGen Pharma Corp. (TSXV: NGEN) is a clinical-stage biotech company that develops innovative treatments for nervous system repair following damage caused by injury or disease. Thus far, NervGen has completed eleven financings amounting to CDN $81M. 
  2. Satellos Biosciences Inc. (TSX: MSCL) specializes in developing life-improving medicines to treat degenerative muscle diseases. It has completed four financings amounting to CDN $66M and recently graduated from TSXV to TSX in February 2024. 

Reflecting on the past year, key trends have significantly propelled the life sciences sector’s growth, setting the stage for continued expansion and innovation. Some of the notable ones to highlight are: 

  • Pharmaceuticals and medical product manufacturing contributed $89B to Canada’s GDP in 2022 (Statistics Canada)
  • Life sciences commercial real estate in Canada is at 100% occupancy – representing an opportunity for growth (JLL Life Sciences Outlook)
  • Artificial Intelligence integration in life sciences, particularly in drug discovery and diagnostics, is expected to grow at a rate of 29% per annum by 2030 (Straits)

These trends indicate a robust framework in Canada for supporting life sciences companies, which contributes significantly to the sector’s capacity to innovate and expand. With the potential easing of capital costs and continued investment in AI and infrastructure, the life sciences industry is well-positioned for an exciting future of growth and innovation, making it a cornerstone of health and technological advancement in North America.

* Unless otherwise noted, all data is sourced from the Market Intelligence Group of TMX Group as of April 30, 2024, and values are quoted in Canadian dollars.

George Khalife, VP of U.S. Capital Formation, based in Chicago, and covers the Midwest U.S. for all sectors at TSX and TSX-V. George can be reached at [email protected].

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