(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

School District 27 (SD27) issued notice Thursday, Feb. 25 of a COVID-19 exposure at Mountview Elementary School. (Angie Mindus photo)
School district reports positive COVID-19 case in Williams Lake elementary school

A letter went home to families of Mountview Elementary School

The City of Williams Lake is asking for public feedback on whether it should explore the opportunity to host a Greater Metro Hockey League team in Williams Lake. (Angie Mindus photo - Williams Lake Tribune)
City of Williams Lake seeks feedback on hosting junior hockey league team

A league expansion application in Quesnel is also pending

A rainbow shining on Kelowna General Hospital on May 12, 2020 International Nurses Day. (Steve Wensley - Prime Light Media)
New COVID cases trending down in Interior Health

24 new cases reported Thursday, Feb. 25, death at Kelowna General Hospital

LADDER USED IN FIRE FIGHT: While smoke billows out of the second floor of the Maple Leaf Hotel, members of the Williams Lake Volunteer Fire Department fight to contain the blaze. The department was called out Tuesday morning to battle the blaze that wreaked havoc on the interior of the 57-year-old hotel. One man, Harold Hurst of Riske Creek, died in the fire. (Ernest Engemoen photo - Williams Lake Tribune, April 12, 1977)
FROM OUR ARCHIVES: Ladder used in fire fight

The department was called out Tuesday morning to battle the blaze

Provincial funding in the amount of $300,000 has been announced for the Cariboo Regional District’s plans to improve the Anahim Lake Airport runway. (CRD photo)
$300,000 provincial funding to fuel Anahim Lake Airport runway upgrade

The recovery grant is one of 38 announced to support jobs in rural communities

Provincial health officer Dr. Bonnie Henry updates B.C.’s COVID-19 situation at the B.C. legislature. (B.C. government)
B.C. reports 10 additional deaths, 395 new COVID-19 cases

The majority of new coronavirus infections were in the Fraser Health region

Cannabis bought in British Columbia (Ashley Wadhwani/Black Press Media)
Is it time to start thinking about greener ways to package cannabis?

Packaging suppliers are still figuring eco-friendly and affordable packaging options that fit the mandates of Cannabis Regulations

A new survey has found that virtual visits are British Columbian’s preferred way to see the doctor amid the COVID-19 pandemic. (Unsplash)
Majority of British Columbians now prefer routine virtual doctor’s visits: study

More than 82% feel virtual health options reduce wait times, 64% think they lead to better health

Captain and Maria, a pair of big and affectionate akbash dogs, must be adopted together because they are so closely bonded. (SPCA image)
Shuswap SPCA seeks forever home for inseparable Akbash dogs

A fundraiser to help medical expenses for Captain and Maria earned over 10 times its goal

The missing camper heard a GSAR helicopter, and ran from his tree well waving his arms. File photo
Man trapped on Manning mountain did nearly everything right to survive: SAR

The winter experienced camper was overwhelmed by snow conditions

Cory Mills, Eric Blackmore and A.J. Jensen, all 20, drown in the Sooke River in February 2020. (Contributed photos)
Coroner confirms ‘puddle jumping’ in 2020 drowning deaths of 3 B.C. men

Cory Mills, Eric Blackmore and A.J. Jensen pulled into raging river driving through nearby flooding

Castlegar doctor Megan Taylor contracted COVID-19 in November. This photo was taken before the pandemic. Photo: Submitted
Kootenay doctor shares experience contracting COVID-19

Castlegar doctor shares her COVID experience

Ashley Paxman, 29, is in the ICU after being struck by a vehicle along Highway 97 Feb. 18, 2021. She remains in critical condition. (GoFundMe)
Okanagan woman in ICU with broken bones in face after being struck by car

She remains in serious condition following Feb. 18 incident

Vancouver International Women in Film Festival kicks off March 5.
Women in Film Festival features two B.C. filmmakers

The 16th annual festival kicks off March 5, 2021

Most Read