Transcript Industry Comparison by GDP and Percentage of the

Industry Comparison by GDP
and Percentage of the Economy
Note: Data based on preliminary 2009 GDP figures.
Sources: Source Data - Statistics Canada, CANSIM Table 379-0027
Methodology - Industrial Biotechnology. December 1, 2008, 4(4): 363-366. doi:10.1089/ind.2008.4.363
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Canada’s Biotechnology Companies by Sector
Source: Canadian Life Sciences Database
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Why biotech is different from
other technology
• Pure science
• Highly Regulated
• Longer development cycles so longer time
to revenue
• Large amounts of patient capital needed
for development
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Sustainable Capital Formation
The innovation is here, but the risk capital required to
sustain R&D in the long-run is lacking.
Canada’s biotechnology industry requires $1 billion annually
to sustain itself. This is capital from all sources:
•
•
•
•
Private equity and venture capital
Public markets
Commercial banks
Governments
Source: Biotech 2010 Life Sciences: Adapting for Success, Burrill & Company
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Biotech Venture Financing
2007
Q1
Q2
Q3
2008
Q4
Q1
Q2
Q3
2009
Q4
Q1
0.00%
Q2
Q3
2010
Q4
Q1
Q2
-7%
-20.00%
-40.00%
-56%
-60.00%
-80.00%
-100.00%
Canada
Sources: Thomson Reuters, PricewaterhouseCoopers
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United States
Facilitating Sustainable
Capital Formation: Flow-through Shares
A flow-through share is:
• A type of share allowing corporations to transfer
exploration and development expenses to investors.
• Investors can use these expenses as deductions
against their personal income tax.
• Eligible corporations are those involved in the
exploration, production, and processing of certain
commodities:
• Mining
• Oil and gas
• Renewable energy
Economic Impact of Flow-through Shares
in Canada’s Biotechnology Industry
Source: PricewaterhouseCoopers LLP, Economic Impact of Flow-through Shares in Biotechnology Industry
Global Innovation Initiatives
Support Program
Australia
-Venture Capital Limited
Partnerships Program (VCLP)
-Biotech Venture Fund
Value of Program
•Flow-through taxation treatment on investments. Foreign investors
in the fund are exempt from capital gains tax on their share of any
profits made.
•$250 million fund intended to help commercialise technologies of
emerging biotech companies.
China
Emerging Technologies Fund
•$9.2B investment over 2 years specifically earmarked for emerging
technologies including biotechnology.
France
-Research Tax Credit
•Research tax credit equal to 30% for expenses less than $159M a
year. No research tax credit ceiling.
•Establishment of a $206.5M biotechnology fund to support
domestic biotech research and development.
-National Biotechnology Fund
Israel
-Capital gains tax exemption
-National Biotech Fund
Source: BIOTECanada Research Services
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•Capital gains tax exemption on investments in research-intensive
companies.
•$80 million life sciences venture capital fund.
Global Innovation Initiatives
Support Program
Singapore
-Relief for Capital Losses
-Industry Alignment Fund
Value of program
•Losses incurred from the sale of shares can be set against the
investor’s other taxable income.
•$1B fund directed at connecting public- and private-sector
researchers and driving investment in R&D.
Taiwan
-Shareholder Investment Tax
Credit
-National Biotechnology Fund
•10% ITC on investments in biopharma stock. Corporations
receive a 20% credit.
•Public-private venture capital fund valued at $315M (planned to
go up to $2.18B within 10 years).
United
Kingdom
-Venture Capital Trust Scheme
-Strategic Investment Fund for
Advanced Technologies
•Income tax relief, capital gains tax relief, and relief for capital
losses for individual investments in venture capital trusts.
•$1.09B fund directed at research-intensive technologies
including biotechnology.
United States
-Therapeutic Tax Credit
-Small Business Innovation
Research (SBIR) grants
•50% refundable credit for emerging health-care SMEs.
•Increases to grant funding programs; maximum awards
increased up to $1M.
Source: BIOTECanada Research Services
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