(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

Just Posted

The Terrace & District Chamber of Commerce is hosting a virtual all-candidates forum for the Terrace council byelection on May 25 at 7 p.m. (Ben Bogstie/Terrace Standard)
Date set for Terrace council byelection all-candidates forum

Forum will be held virtually on May 25, at 7 p.m.

Galdys Radek poses alongside her car called ‘war pony’ which has photos of murdered and missing Indigenous women and girls from B.C. (Binny Paul/ Terrace Standard)
Keeping alive the stories of murdered & missing Indigenous women and girls

Gladys Radek on grassroots activism for MMIWG and teaching the next generation to raise their voices

A worker at Wee Geordies Liquor Store held at knifepoint on Wednesday at 3:30 p.m. A female entered the store and grabbed a bottle of liquor and produced a knife and demanded money. She was not located. (Wee Geordies video surveillance screenshot)
VIDEO: Two stores robbed on the same day in Kitimat

The first incident was at 5:45 a.m. and the second incident occurred 3:30 p.m.

Do Your Part Recycling Co is celebrating 15 years of its operation in Terrace this May. (Binny Paul/Terrace Standard)
How a homegrown Terrace business became a vital cog in the regional recycling initiative

Do Your Part Recycling owner Kasey Lewis on how they started 15 years ago

Construction continues on Coast Mountain College’s student residence on May 12, 2021. (Ben Bogstie/Terrace Standard)
VIDEO: Work continues on major projects at Coast Mountain College

Price tag of $35 million set for housing, substantial renovations

An avalanche near Highway 1 in Glacier National Park. Avalanche Canada will benefit from a $10 million grant from the B.C. government. (Photo by Parks Canada)
Avalanche Canada receives $10-million grant from B.C. government

Long sought-after funds to bolster organization’s important work

Sicamous RCMP Sgt. Murray McNeil and Cpl. Wade Fisher present seven-year-old Cody Krabbendam of Ranchero with an award for bravery on July 22, 2020. (Contributed)
7-year old Shuswap boy receives medal of bravery for rescuing child at beach

Last summer Cody Krabbendam jumped into the lake to save another boy from drowning

B.C. Health Minister Adrian Dix and provincial health officer Dr. Bonnie Henry update the province’s COVID-19 vaccine program, May 10, 2021. (B.C. government)
B.C.’s COVID-19 infection rate stays below 500 a day over weekend

14 more deaths, down to 350 in hospital as of Monday

Royal Bay Secondary School’s rainbow crosswalk was vandalized shortly after being painted but by Monday, coincidentally the International Day Against Homophobia, Transphobia and Biphobia, the crosswalk had been cleaned up and students had surrounded it with chalk messages of support and celebration. (Zoe Ducklow/News Staff)
B.C. high’s school’s pride crosswalk restored following ‘hateful’ graffiti attack

Hate terms, racial slur, phallic images spray-painted at Greater Victoria high school

Terrance Mack would have celebrated his 34th birthday on May 13, 2021. Mack’s family has identified him as the victim of a homicide in an apartment on Third Avenue in Port Alberni sometime in April. (SUBMITTED PHOTO)
Family identifies Ucluelet man as victim of Vancouver Island homicide

Terrance Mack being remembered as ‘kind, gentle’ man

Vancouver Canucks’ Jake Virtanen (18) and Calgary Flames’ Josh Leivo, front right, vie for the puck as goalie Jacob Markstrom, back left, watches during the first period of an NHL hockey game in Vancouver, on Saturday, February 13, 2021. THE CANADIAN PRESS/Darryl Dyck
Vancouver Canucks forward Jake Virtanen sued over alleged sexual assault

Statement of claim says the woman, identified only by her initials, suffered physical and emotional damages

An avalanche near Highway 1 in Glacier National Park. Avalanche Canada will benefit from a $10 million grant from the B.C. government. (Photo by Parks Canada)
Avalanche Canada receives $10-million grant from B.C. government

Long sought-after funds to bolster organization’s important work

Daily confirmed COVID-19 cases reported to B.C. public health, seven-day rolling average in white, to May 12, 2021. (B.C. Centre for Disease Control)
B.C. preparing ‘Restart 2.0’ from COVID-19 as June approaches

Daily infections fall below 500 Friday, down to 387 in hospital

(Kamloops This Week)
Puppy’s home in question as BC Supreme Court considers canine clash

Justice Joel Groves granted an injunction prohibiting the sale or transfer of the dog

Most Read