A bright spot appeared this week on the Canadian biotech landscape as Interface Biologics Inc. – a MaRS tenant and advisory services client – announced that it has secured a $5 million financing round.
Participating in the round are existing investors Covington Capital, VG Partners and BDC Capital. In connection with the financing, Lily Lam, Vice President Investments at Covington Capital, is joining the Interface Biologics’ Board of Directors and Thomas P. Reeves has been appointed the new President and CEO and is also joining the Board of Directors.
This investment not only underscores the strength of the commercial pipeline for this privately held developer of novel biomedical-polymers for use in implantable medical devices but also speaks to the strength of the med-tech cluster in Toronto and Ontario.
More than 600 companies – in medical devices, assistive devices, diagnostics and medical imaging – are based in Ontario, largely clustered around universities, hospitals and research centres; 83% of those companies are either in Toronto or within a one-hour drive. In total, they employ more than 22,000 people.
And it’s a field that generates value for investors: a 2008 review by MaRS showed that the medical device field has delivered average gross margins of over 60% and delivered twice as much value for shareholders as did the S&P500 between 1994 and 2005. Med-tech is also viewed as a “defensive” industry as it does not follow the general economic cycle – hence the bright spot amid the global gloom.
If anything, the global situation has made the work of MaRS – and all of our innovation and investment partners – ever more important. Building the next generation of knowledge-based businesses is our opportunity to take control of our future economic destiny, reinventing not only Toronto but Ontario’s economy.
What do we need? More smart investments like this one – and we need them urgently.
To read more on the state of venture financing and recommendations for action, check out the Canadian Venture Capital and Private Equity Association (CVCA).