Venture Capitalist Targets Biotech

February 27, 2012
Author: Globe and Mail

As a Canadian in Silicon Valley, venture capitalist Ann Hanham has done it all. Her distinguished résumé includes taking the first stem cell device for approval to the Food and Drug Administration, as well as taking public a number of companies.

But after being away for over two decades, Ms. Hanham is coming home – not because the venture capital business in Canada is thriving, but because it isn’t. And she wants to change that.

It is heartbreaking that so much talent and so much brilliant research isn’t being commercialized,” says Ms. Hanham from San Francisco, where she is currently a managing director at Burrill & Company, a venerable venture capital firm that invests money on behalf of partners such as Unilever NV, Archer- Daniels-Midland Co. and Nestlé SA.

The numbers tell a grim story. In 2000, the height of venture capital activity in this country, $5.9-billion was invested in 1,007 Canadian startups, according to Thomson Reuters. Last year, just $1.5-billion was raised by 444 Canadian firms.

To improve that dismal record, Ms. Hanham is putting her Silicon Valley contacts and experience to work. Her goal: assemble a $200-million biotechnology and life sciences fund that invests in both stellar university research as well as burgeoning companies in industrial chemicals, agricultural biotechnology, life sciences and biofuels that need capital. She is moving back to the country to run it.

For her, this endeavour isn’t about the money to be made. It’s about rescuing all the Canadian research that is created, only to die.

Canada’s spending on science research and development, per capita, is in the top tier globally – a recent report pegged federal R&D spending at $7-billion, largely through tax credits – but its return on those investments is practically negligible. Our universities have some of the brightest minds around, but very little of their work sees the light of day.

“It’s so obvious when you go to Toronto or other [Canadian] places that there’s way more technology than there is money to fund it,” said Mike Powell, general partner at venture capital firm Sofinnova Ventures in Silicon Valley. Originally from Toronto and armed with a PhD in physical chemistry from the University of Toronto, he now lives in California and keeps up with what’s happening back home.

 

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“I spend a lot of time in Asia, and I can tell you, they’re going to eat our lunch if we don’t get moving,” she says.