(The Canadian Press)

(The Canadian Press)

Canadians have some domestic options to invest in COVID buzz, says biotech CEO

Relatively few Canadians do invest in U.S. biopharma, according to financial data firm Refinitiv

Canadians looking for profitable stocks related to the fight against the COVID-19 pandemic have plenty of homegrown options, but investing in small domestic firms carries elevated risks as well as rewards.

BetterLife Pharmaceuticals Inc. is one such company. The Vancouver firm is in final testing on a treatment for cases in which a vaccine doesn’t work or patients refuse to be inoculated.

“We have a Made-in-Canada solution,” says founder and CEO Dr. Ahmad Doroudian. His company has worked with the National Research Council and Toronto immunologist Dr. Eleanor Fish.

The company has developed an inhalable method to treat COVID-19 patients by helping the immune system to defeat the virus.

“We think we can make an impact. We absolutely think we’re going to be part of a treatment cocktail that’s going to be needed to contain this infection in years to come.”

Other names include Algernon Pharmaceuticals Inc., IMV — which is working on a vaccine — and WELL Health Technologies Corp., which offers antibody tests.

Investing in biotechnology is by nature risky, Doroudian concedes, but the rewards are much larger than investing in a global vaccine developer like Pfizer, whose shares are more stable.

While shares of small biotech firms can surge or plunge based on clinical results, their trading prices are much lower.

BetterLife’s shares have traded between 40 cents and $3 over the last 52 weeks with its market capitalization currently standing at $28.5 million. Pfizer’s value is US$227 billion based on a US$40.84 share price.

Other Canadian biotech firms are private but have partnered with large multinationals that are available for investment. For example, Medicago is working with GSK.

Vancouver’s AbCellera Biologics Inc. and Eli Lilly and Company have co-developed the anti COVID drug bamlanivimab to treat patients with mild or moderate symptoms that has received emergency use approval in Canada and the United States.

Approval comes as AbCellera seeks to raise US$200 million through an IPO on the Nasdaq Global Market.

The hype over the biotech company has grown with the announcement that Facebook early investor and PayPal co-founder Peter Thiel has joined its board of directors.

Yet, buying into a company that’s launching an initial public offering because they have a promising COVID treatment or vaccine can be risky, warns Les Stelmach, portfolio manager at Franklin Templeton Canada.

“Definitely, buyer beware,” he said from Calgary.

For the most part, Canadian investors have to turn to the U.S. to get direct access to pharmaceutical efforts to combat COVID, especially for vaccines.

Even before the virus, investors needed to look outside Canada to build a reasonable position in health care because the sector is dramatically under-represented in the TSX, said Craig Fehr, investment strategist at Edward Jones.

“We’re not necessarily advising our clients to look at specific investments that are the vaccine play per se. But we do think health care should be a meaningful part of any well-diversified equity portfolio because the secular and the cyclical opportunities that exist in that space are compelling to us,” he said in an interview.

Relatively few Canadians do invest in U.S. biopharma, according to financial data firm Refinitiv.

Just 1.4 per cent of Pfizer’s shareholders are Canadians. They hold 78.1 million shares valued at US$2.86 billion. The ratio for GSK is 1.42 per cent, 1.16 per cent for Eli Lilly, 1.36 per cent for Gilead and 0.58 per cent for Moderna.

Still, Pfizer, Moderna and AstraZeneca are attracting heightened investment interest after each announced COVID vaccines.

“I think you buy Pfizer because it’s a good drug company. They make money, and they have a good drug pipeline of new and promising products. It’s not just a play on COVID,” said Stelmach.

Investing in small- and mid-cap biotech companies is difficult because they generally rely heavily on a single source of revenues, said Mike Archibald, vice-president and portfolio manager with AGF Investments Inc.

As a generalist investor Archibald said he doesn’t want to focus a lot of his portfolio that can surge on regulatory approval but collapse on negative news.

“When I’m putting together a portfolio, those are bets that I generally don’t make. And if I’m gonna make them, I usually make them in very, very small percentage increments and would require a large amount of due diligence to ensure that I understand exactly what the potential outcomes are.”

A good strategy for most Canadian retail investors is instead to focus on the positive impact of vaccines on the general economy, said Anish Chopra, managing director with Portfolio Management Corp.

“If you’re looking at reopening trades you’re starting to see them in the marketplace which would be old economy types of industries such as financial services, energy, hospitality.”

Ross Marowits, The Canadian Press

CoronavirusInvesting

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Leila Bui with her parents Tuan (left) and Kairry Nguyen on Jan. 27, 2020 after Tenessa Nikirk was found guilty for striking Bui in a Saanich crosswalk. (Nina Grossman/News Staff)
Driver convicted of dangerous driving after hitting Leila Bui out on bail

Tennesa Nikirk was convicted for striking then 11-year-old Leila Bui with her car

Royal B.C. Museum conservator Megan Doxsey-Whitfield kneels next to a carved stone pillar believed to have significance as a First Nations cultural marker by local Indigenous people. The pillar was discovered on the beach at Dallas Road last summer. Museum curatorial staff have been working with Songhees and Esquimalt Nation representatives to gain a clearer picture of its use. (Photo courtesy Royal BC Museum)
Stone carving found on Victoria beach confirmed as Indigenous ritual pillar

Discussion underway with the Esquimalt and Songhees about suitable final home for the artifact

The Save-On-Foods Memorial Centre will once again be transformed into temporary sheltering for 45 individuals starting in March. (Courtesy of the B.C. Government)
Temporary shelter to resume at Victoria Save-On-Foods arena in March

BC Housing signed lease with GSL Group from Feb. 1 to May 30

A Cessna 170 airplane similar to the one pictured above is reported to be missing off the waters between Victoria and Washington State. Twitter photo/USCG
UPDATE: No sign of small plane that went down in Juan de Fuca Strait

Searchers out on both sides of border between Victoria and Port Angeles

Victoria police are seeking a young woman suspected of spitting on a bus driver in October 2020. (Courtesy of Victoria Police Department)
VIDEO: Young woman sought after ‘spitting assault’ on Victoria bus driver

Suspect became irate after bus came to a sudden stop

British Columbia Health Minister Adrian Dix looks on as Provincial Health Officer Dr. Bonnie Henry addresses the media during a news conference at the BC Centre of Disease Control in Vancouver B.C. (THE CANADIAN PRESS/Jonathan Hayward)
B.C. announces 485 new COVID-19 cases, fewest deaths in months

‘The actions we take may seem small, but will have a big impact to stop the virus,” urges Dr. Henry

Anyone with information on any of these individuals is asked to call 1-800-222-TIPS (8477) or visit the website victoriacrimestoppers.ca for more information.
Greater Victoria Crime Stoppers wanted list for the week of Jan. 26

Greater Victoria Crime Stoppers is seeking the public’s help in locating the… Continue reading

(B.C. government photo)
POLL: Would you like to see restrictions on travel to B.C. from other provinces?

With a host of more virulent strains of COVID-19 appearing across the… Continue reading

Former Vancouver Giants forward Evander Kane is seen here in Game 7 of the second round of the 2009 WHL playoffs against the Spokane Chiefs (Sam Chan under Wikipedia Commons licence)
Gambling debts revealed in details of bankruptcy filing by hockey star Evander Kane

Sharks left winger and former Vancouver Giants player owes close to $30 million total

Othman “Adam” Hamdan, pictured in front of Christina Lake’s Welcome Centre, was acquitted of terrorism related charges in 2017. He has been living in Christina Lake since November 2020. Photo: Laurie Tritschler
Man acquitted on terrorism charges awaits deportation trial while living in Kootenays

Othman Ayed Hamdan said he wants to lead a normal life while he works on his upcoming book

B.C. Premier John Horgan wears a protective face mask to help prevent the spread of COVID-19 prior to being sworn in by The Honourable Janet Austin, Lieutenant Governor of British Columbia during a virtual swearing in ceremony in Victoria, Thursday, November 26, 2020. THE CANADIAN PRESS/Jonathan Hayward
Premier Horgan calls jumping COVID vaccine queue ‘un-Canadian’

Horgan says most people in B.C. are doing their best to follow current public health guidelines

Prime Minister Justin Trudeau, left, and Vancouver Mayor Kennedy Stewart share a laugh while speaking to the media before sitting down for a meeting at City Hall, in Vancouver, on Friday August 30, 2019. (THE CANADIAN PRESS/Darryl Dyck)
Vancouver mayor, Health Canada to formally discuss drug decriminalization

Kennedy Stewart says he’s encouraged by the federal health minister’s commitment to work with the city

Downtown Fernie is pictured after a snowfall.
B.C. Premier John Horgan speaks at B.C. legislature on the province’s mass vaccination plan for COVID-19, Jan. 22, 2021. (B.C. government)
COVID-19 quarantine not an option for B.C., John Horgan says

Apres-ski parties increase risk, not interprovincial travel

Most Read