Canada’s health tech sector got us through the pandemic. Now it’s poised to drive the economic recovery. After a banner year for raises and exits, investors are forecasting new momentum and opportunities in a sector that has often been slow to adopt innovations.
“Healthcare is the largest industry in the world, and still it hasn’t had the information revolution to the extent that other sectors have had,” said Sam Ifergan, founder of iGan Partners, a health technology venture fund. But that is changing. COVID crammed a decade of advancement into a year, making it mainstream for patients to visit a doctor online or discuss anxieties with a chatbot.
As attention turns to the post-pandemic economy, the industry stands to benefit from a further influx of funding. COVID was relentless in pushing at the fissures in our health network, showing where there are lessons to be learned. From creating robust contact-tracing systems to building a stronger manufacturing base for vaccines and medicines, there is work to be done across the board. Next month, MaRS Impact Health, an in-depth two-day conference, will delve into the factors now shaping the sector and consider what they mean for patients, providers, entrepreneurs and investors. Here are four of the biggest trends to watch.
Digital health is set for rapid expansion. Some health technology experts believe between 50 and 70 percent of health visits could be delivered efficiently by phone or online. While a trip to the doctor’s office for a minor ailment might take half a day, an online consultation provider like Maple can give patients prescriptions in minutes.
Sheryl Thingvold, a senior health advisor at MaRS, expects digital health to push into areas such as chronic care, and she sees strong demand for medical devices that patients can use themselves. “The move toward telemedicine has caused us to reimagine how we deliver care and there are a lot of supportive technologies that are coming along with that,” she said. As an example, she points to health tech venture iRegained, which is developing a device to help stroke patients recover hand function that could be used at home with a physician monitoring remotely.
Investors have taken note of the opportunities and are buying into health businesses. In a record year for IPOs in 2020, healthcare companies led the pack with AbCellera, Repare Therapeutics and Fusion Pharmaceuticals all listing on Nasdaq. Dialogue — founded just five years ago — continued that trend in March by joining the TSX.
Meanwhile, funding rounds are getting bigger, with blockbuster deals for Chinook Therapeutics ($140 million) and Ventus Therapeutics ($85 million) last year.
Richard Bozzato, a senior health advisor at MaRS, said companies with deep intellectual property and platform technologies that can be applied to numerous therapeutic areas are drawing most interest. “Those companies are becoming very successful in raising significant funds and also creating partnerships with multinational pharmaceutical companies,” he said. AbCellera, which uses AI to identify potential therapeutics, is currently working with Eli Lilly on clinical trials of two antibodies that show promise against variants of COVID-19.
The pandemic showed that Canada’s health sector is over-reliant on overseas manufacturing. Having spent the past 14 months competing in global markets for ventilators and vaccines, the federal government is now pushing hard to bring the supply chain home.
The recent budget outlined a $2.2-billion investment over seven years in biotechnologies that could plug gaps such as our lack of capacity to make advanced biologic products needed for vaccines and immunotherapies. A major expansion of the Vaccine and Infection Disease Organization’s facilities in Saskatoon is on the cards, and $1 billion is being made available to fund life-sciences and biomanufacturing businesses throughout Canada. In Hamilton, McMaster University and CCRM, a health technology incubator, are planning a new facility for commercial production of cells and viral vectors needed for regenerative medicine.
Canada’s two biggest cities have historically carved up the health venture ecosystem between them. Montreal led in pharmaceuticals; Toronto had particular strength in medical imaging. Now there are also promising developments across the country. Vancouver, home to AbCellera and Chinook, is rising rapidly as its already strong biotechnology ecosystem is boosted by public investment in the city’s digital technology supercluster. In Ontario, the CCRM’s partnership with McMaster, is part of an effort to encourage a health innovation region bookended by research clusters in Toronto and Hamilton. Waterloo has growing strength in medical devices. Although Atlantic Canada, which was home to an early experiment in telemedicine at a hospital in P.E.I., lacks a focal city for health innovation, promising companies are emerging throughout the region. For instance, Cape Breton-based Health Outcomes Worldwide is developing a digital platform for remotely monitoring how patients’ wounds are healing.
The renewed focus on healthcare has put a spring in the step of investors. “I’m very bullish on the ecosystem,” said Ifergan. Canada’s hotspot cities like Toronto are now within striking distance of building the critical mass of companies seen in global leaders like Boston. “We’re not there yet, but we could be and that would be great for the economy.”
MaRS Impact Health is a virtual conference exploring the frontiers of health innovation on June 22 and 23. Registration is now open.