It's a small group of shareholders that raises the highest glass when a biotech company in B.C. is bought out by a foreign firm. Beyond the handful of exiting shareholders who often receive exorbitant paydays, it is debatable as to what a foreign firm contributes to the B.C. cluster in a buyout.
"This has been raised many times before," said Steve Turner, an associate with Ventures West, a venture capital firm in Vancouver. "B.C. [is] a great place to start companies, but it hasn't built up critical mass of head offices and more mature public companies." Turner and others agree that as long as entrepreneurs are reinvesting their time and money back into the cluster, "buyout" doesn't have to be an ugly word. "If a U.S. firm or an international firm acquires venture-backed technology, and the entrepreneurs are freed up to spin off and start new companies, then the VCs have an exit and a pool of repeat entrepreneurs to invest in again."
So what has become of the teams that formed AnorMED Inc., ID Biomedical Corp. and Aspreva Pharmaceuticals Corp., three of the most notable made-in-B.C. biotechs to be snapped up by large multinationals in multimillion and billion dollar deals? "I'm staying pretty busy," said Tony Holler, a co-founder of ID Biomedical and its CEO when it was acquired by the United Kingdom's GlaxoSmithKline PLC for $1.7 billion in 2005. Mere months after shaking hands on that deal, Holler was chairing a Vancouver company - known today as CRH Medical Corp. (CRM:TSX-V) - that operates two dozen colorectal health clinics across the United States. Holler is one of the largest shareholders in CRH - as he is with Vancouver's Response Biomedical Corp. (TSX:RBM, OTCBB:RPBIF) and Georgia-based Inviro Medical Devices.
Other former members of the ID team - including its former president, CFO and chair - also have varying roles and equity stakes in CRH, Response and Inviro. "I want us to have a significant equity stake in these companies; to put us on the same footing as shareholders," said Holler about the philosophy that he and the ID team share when looking to re-invest their efforts and equity into developing companies. As successful as ID was, it was also a risky venture. That's why the ID team's focus today is on companies that have approved and market-ready products. "Those three companies are classic examples," said Holler of Response, CRH and Inviro. "Somebody came to me and said - "listen Tony, we need to really [look again at] at this company, develop a strategy, build a team around that strategy, raise some money and start learning how we are going to sell this product."
Holler expects CRH, Response and Inviro to follow the path of ID. Once we've proven the business model and have developed a business that can grow aggressively, I think all of these companies, in my view will be sold to someone much larger than us," he said. What happens then to the ID team? "[We] do it all over again," said Holler.
Michael Abrams was still a significant shareholder in AnorMED - a company he co-founded - when it was bought for US$584 million by Genzyme Corp. in 2006. "It was a good financial outcome for me," said Abrams, who today sits on the boards of B.C. firms Migenix Inc. and Tekmira Pharmaceuticals Corp. (TSX:TKM), as well as Indel Therapeutics, a spinoff from the University of British Columbia. Abrams has held onto the gains from his stake in AnorMED for a future investment into a new startup that he and two other senior managers of AnorMED are developing. "A big success factor in [biotech companies] is the ability to at least know your colleagues."
Since the acquisition of Aspreva last year, Michael Hayden, an Aspreva founder, has continued his work as director of UBC's Centre for Molecular Medicine and Therapeutics. Hayden believes that B.C.'s biotech community has to have a broader vision of success if the industry is to remain sustainable here.
"We need to find a way so that these deals are not only celebrated by shareholders, but the community in which we live," said Holler, who is also a founder and CSO of Burnaby's reputable Xenon Pharmaceuticals.
Hayden noted that Aspreva has not maintained the large presence in the biotech community that it had prior to being acquired by a Swiss firm last year for US$915 million. "To that, I would say Aspreva failed," he said. "[It is] still here, but the question is for how long." Added Hayden: "Success should be measured against the benefits to patients that we seek to serve, the community in which we find ourselves and the country in which we live."