Business Corner

Canada holds tremendous investment opportunity in biotech

Viterra makes changes to its corporate management team

Agriculture, and particularly agricultural research, is fast gaining attention as the place to invest as the world struggles to feed a growing population and wean itself from fossil fuels, says Dr. John Hamer from the U.S. life sciences investment firm Burrill & Company.

Hamer gave the first of two keynote addresses to kick off the first day of the Agricultural Biotechnology International Conference (ABIC 2010) in Saskatoon. He spoke of past challenges in agbiotech investment, as well as future opportunities.

Hamer says that while a small information technology firm might be able to start out of someone’s garage, the long regulatory times involved in agbiotech innovation make this impossible. This makes finding a partner with deep pockets essential, which means a willingness to share knowledge of the innovation.

“Most of these companies are working with university germ plasm, which puts them about eight to 10 years from commercialization,” said Hamer.

Another challenge is that some venture capital firms had their fingers burned both in the economic crisis of 2008, and in investments that were “oversold and under-delivered,” such as in biotech and solar energy. Venture capitalists are now cautious, waiting for proof that the company really has figured out how to capture value from their ideas.

Along with his words of caution, Hamer also spoke of promising territory in agbiotech: bioenergy. Bioenergy promises to lower carbon emissions, and even allow farmers to grow their own fuel and increase their efficiency in the process. A critical component of bioenergy is feedstocks, that is, what to use to make the energy, whether it be hybrid poplar trees, cereal straw or palm oil.

“We see Canada as a place of tremendous opportunity,” Hamer said.

Viterra Inc. will make a change to its legal services function in recognition of its global market position. As a result, Ray Dean, Viterra’s senior vice president, General Counsel/Corporate Secretary will step down effective immediately to pursue other interests. Viterra will undertake a global search for a new leader.

As well, Viterra will formally integrate its financial products group within Agri-Products under the leadership of Doug Wonnacott, senior vice president of Agri-products. Financial product will become an integrated product line within the Company’s service offering to western Canadian grain and livestock producers, complementing its portfolio of seed, fertilizer, crop protection products, equipment, feed and forage product offerings. This integration will result in the elimination of the senior vice president of Financial Products position previously held by George Prosk.

Dealmakers

n MethylGene Inc. (Montréal, QC) enters into an agreement with Dutchess Opportunity Cayman Fund Limited (“Dutchess”) for an Equity Line Facility (ELF) of up to $15 million of capital over 36 months, at MethylGene’s discretion, through the subscription of newly issued common shares. “This facility provides us with flexible access to capital at reasonable terms to help us achieve our goals,” said Charles Grubsztajn, president and chief executive officer of MethylGene. “We continue to progress our pipeline, with a focus on completing the three clinical trials evaluating MGCD265, our proprietary multi-targeted (Met) kinase inhibitor, in preparation for a randomized Phase II trial in non-small cell lung cancer patients. Accessing this new capital, coupled with our commitment to leverage the opportunities that our proprietary pipeline offers, is a positive step forward that demonstrates our dedication to enhancing shareholder value.”

n Stem Cell Therapeutics Corp. (Calgary, AB) announces budgetary approval of the SCT-sponsored investigator-lead Phase IIa study entitled “A Phase IIa, Single Center, Open Label Study to Characterize the Safety of Human Chorionic Gonadotrophin (hCG) and Epoeitin Alpha (EPO) in Traumatic Brain Injury”. After strategic discussions between management and the board of directors a decision was made to go forward with the TBI clinical study. SCT will provide the funding necessary to complete the enrollment of 10 TBI patients in a single center open label study, lead by Dr. David Zygun, to characterize the safety of hCG and EPO in traumatic brain injury. A series of efficacy endpoints are part of the trial design in order to access various aspects of neurological status. Dr. Alan Moore, president and CEO of SCT said “We are excited to fund this study, which is a significant milestone, and demonstrates the Company’s commitment to the advancement of our programs. This is an important step for SCT as we move forward and highlights our dedication to prospering in the biotechnology area. We are in the process of evaluating all our programs and plan to make announcements as decisions are made.”

n Novadaq Technologies Inc. (Toronto, ON) completes the final design review for the integration of the company’s SPY® imaging technology into the 3-D high definition imaging capabilities of the Intuitive Surgical, Inc. da Vinci® Surgical Robotic System. Final design review completes the requirements of the final milestone outlined in Novadaq’s License and Development Agreement with Intuitive, which was signed in January 2009. Novadaq also announced that it has received the second $500,000 of the final $1M milestone payment from Intuitive. The first $500,000 of the final payment was previously received from Intuitive in May 2010 for completing the first human use of the system. Novadaq also entered into a Supply Agreement with Intuitive in January 2009. Under terms of that agreement, Novadaq will manufacture and supply the key components required to enable fluorescence imaging with da Vinci® during robotic surgery.