The people behind one of the biggest-ever acquisitions in Canadian biotech are headed back to the lab.
What happened: Venture capital firm Versant Ventures and pharma giant Novartis launched Borealis Biosciences in Vancouver to develop RNA-based treatments for kidney diseases.
- It’s backed by a US$50 million Series A, plus $100 million in research funding from Novartis, which has the option to acquire two future projects from Borealis for up to $750 million.
Catch-up: Borealis builds on the success of Chinook Therapeutics, which was also started by Versant and sold to Novartis last year for $3.5 billion. Many of Borealis’s initial 25-person team were at Chinook, and they even work out of the facility once occupied by their old company.
Why it matters: Life sciences ventures have been incredibly lucrative in Canada, but the industry needs more startups like Borealis to replace the many that have been acquired in recent years if the sector is going to continue pumping out success stories.
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Since 2021, companies like Trillium Therapeutics, Baylis Medical, Bellus Health, Inversago Pharma, and Fusion Pharmaceuticals also sold for over $1 billion.
- According to the latest CVCA analysis, venture investment in life sciences is on pace with the last two years, which were down from the peaks of 2021 but up slightly from pre-pandemic levels.
Zoom out: Life sciences are less attractive to investors because the time R&D and commercialization takes — even compared to other innovation-focused sectors — means waiting longer for returns. Specialist funds like Versant are set up to take that leap of faith, but relatively few of those exist in Canada’s young venture ecosystem.
What they’re saying: “It’s a big, unrealized opportunity,” says John Rikhtegar, director of capital at RBCx, which launched a platform for life sciences startups in November. “Life sciences have been among the biggest exits in Canadian venture history, but it’s only gotten 7% of capital in the last decade. We’re definitely punching below our weight.”