(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

The Quartz Creek watershed is located in the area behind the small community of Ymir south of Nelson. Photo: Tyler Harper
Timber companies swap management of controversial Ymir watershed

Fruitvale’s ATCO Wood Products is now overseeing Quartz Creek

Toronto Public Health nurse Lalaine Agarin makes preparations at Toronto’s mass vaccination clinic, Jan. 17, 2021. THE CANADIAN PRESS/Frank Gunn
3 deaths, 234 new cases of COVID-19 in Interior Health over the weekend

One death connected to outbreak at Kamloops’ Royal Inland Hospital, where 20 patients and 28 staff have tested positive

Zaudanawng “Jay-Dan” Maran in his Creston home. Hanging on the wall behind him is a logo of Kachin’s Manaw festival. Photo: Aaron Hemens
From Myanmar to Creston: The story of a refugee

In October 2007, Zaudanawng “Jay-Dan” Maran and his friends encountered a woman being sexually assaulted by two Myanmar soldiers.

The trial of Harry Richardson began Monday at the Nelson courthouse. File photo
Trial of man accused of shooting RCMP officer near Argenta in 2019 begins

Harry Richardson is facing five charges in a Nelson courtroom

Crews with Discovery Channel film as an Aggressive Towing driver moves a Grumman S2F Tracker aircraft around a 90-degree turn from its compound and onto the road on Saturday, Jan. 23, 2021. It was the “most difficult” part of the move for the airplane, one organizer said. (Jenna Hauck/ Chilliwack Progress)
VIDEO: Vintage military plane gets towed from Chilliwack to Greater Victoria

Grumman CP-121 Tracker’s eventual home the British Columbia Aviation Museum on Vancouver Island

Kamloops This Week.
48 COVID-19 cases and one death associated with outbreak at Kamloops hospital

One of the 20 patients infected has died, meanwhile 28 staff with COVID-19 are isolating at home

Rolling seven-day average of cases by B.C. health authority to Jan. 21. Fraser Health in purple, Vancouver Coastal red, Interior Health orange, Northern Health green and Vancouver Island blue. (B.C. Centre for Disease Control)
2nd COVID vaccine doses on hold as B.C. delivery delayed again

New COVID-19 cases slowing in Fraser Health region

Provincial health officer Dr. Bonnie Henry talk about the next steps in B.C.’s COVID-19 Immunization Plan during a press conference at Legislature in Victoria, B.C., on Friday, January 22, 2021. Two more cases of the COVID-19 strain first identified in South Africa have been diagnosed in British Columbia, bringing the total to three as of Jan. 16.THE CANADIAN PRESS/Chad Hipolito
B.C. now has three cases of South African COVID-19 variant, six of U.K. strain

Both variants are thought to spread faster than earlier strains

Rodney and Ekaterina Baker in an undated photo from social media. The couple has been ticketed and charged under the Yukon’s <em>Civil Emergency Measures Act</em> for breaking isolation requirements in order to sneak into a vaccine clinic and receive Moderna vaccine doses in Beaver Creek. (Facebook/Submitted)
Great Canadian Gaming CEO resigns after being accused of sneaking into Yukon for vaccine

Rod Baker and Ekaterina Baker were charged with two CEMA violations each

Police discovered a makeshift nightclub in a Vancouver apartment on Jan. 23, 2021, and say it wasn’t the first time this month officers have been called to the unit over social gathering concerns. (Phil McLachlan - Capital News)
Doorman of makeshift ‘booze-can’ in Vancouver apartment fined; police look to court order

This marks the fourth complaint about social gatherings inside the apartment in January

A Kelowna couple welcomed their Nooner baby in December. (Flytographer)
Kelowna couple welcomes baby girl from Hotel Zed Nooner campaign

Nicole and Alex will now have 18 years of free stays at the hotel

Kyrell Sopotyk was drafted by the Kamloops Blazers in 2016 and played two seasons with the Western Hockey League club. (Photograph By ALLEN DOUGLAS/KTW)
Kamloops Blazer paralyzed in snowboarding accident sparks fundraiser for family

As of Jan. 24, more than $68,000 had been raised to help Kamloops Blazers’ forward Kyrell Sopotyk

(Pixhere photo)
B.C. dentists argue for COVID-19 vaccine priority after ‘disappointing’ exclusion from plan

Vaccines are essential for dentists as patients cannot wear masks during treatment, argues BCDA

Most Read