Hong Truong

Thanks to our friends in the ecosystem for a white paper that sums-up and builds on much of the data we’ve discussed for the past year. While the author of the Investment Executive article is right that Family Offices have indeed largely missed out on the best performing VC sector of the past decade, his headline transposed financing data ($842M) & M&A data ($2.8B) thus shaving nearly $2B off the liquidity & value creation success story for CA's life sciences sector in 2024. Some of the most compelling insights from adMare BioInnovations’ “Does Canada Own its Life Sciences Future?” include: - Canada’s life sciences engine is roaring: While 11/50 top CDN VC-backed exits in the past decade were in life sciences, yet they delivered 44% of total exit value & 6/10 top exits. But that's not the full story, as when one includes Lumira Ventures' highly successful exits from publicly traded companies like Zymeworks & Aurinia, it’s more like 9/10 of the top deals & >50% of all liquidity. - VCs provided the bulk of funding to CDN therapeutics companies: 78% at early-growth & 94% at late-stage. - Funding shortfall: Comparing VC investment in life sciences to GDP over the past decade in CA vs the US, points to a funding shortfall of ~$1.5B per year (see below for more affirmation). - Most value-capture goes abroad: 7/20 top exits were $1B+ acquisitions by international firms, accounting for 71% of total exit value. Unfortunately, over 75% of those returns (we think this is a low estimate) went to international investors highlighting the cost of our domestic focus on funding ICT vs biotech. The simple reality is that domestic capital lacks the depth to participate across the funding continuum - a problem that should be easy to resolve. - Strong returns: building on BDC data that shows the significant out-performance of life sciences relative to all sectors of the CDN VC ecosystem, the authors noted that this is not exclusive to CA. Both a European Investment Fund report & US NVCA data for 2024 show life sciences outperform ICT in terms of returns. The opportunity is massive: In our deal flow pipeline alone, 47 CDN life sciences firms are seeking $1.6B by end-2025. The top half (our high-priority companies) are alone seeking $1B. The funding gap has never been larger: Domestic capital formation for life sciences has been negligible since 2021 and is now at 1/100 the level in the US. The opportunity has never been more compelling: As BDC notes, “This is a key moment for the CDN ecosystem to rise to the challenge and direct more capital towards domestic LS innovation.” CA continues to build world-class life sciences firms, but without more engagement from family offices & institutional capital (in particular CDN pension funds) – we risk ceding all the jobs, impactful products for patients, and returns to foreign investors. It doesn't have to be this way & collaborative partnerships with VC performance leaders like Lumira Ventures are a proven solution

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