Canada Pension Plan Investment Board has made a rare foray into Canada’s teeming biotech sector, investing US$20-million in Hamilton cancer treatment developer Fusion Pharmaceuticals Inc.
That adds to the US$105-million Fusion raised last April and comes after a strong year for Canada’s biotech sector. Last year, two Canadian drug developers sold for US$1-billion valuations, while Victoria’s Aurinia Pharmaceuticals Inc. surpassed that value after disclosing positive clinical results for its lupus drug. Several biotech firms secured significant sums to fund development.
While the sector has delivered solid investor returns, much of the institutional interest has come from away. Canadian investors have been limited to a few Quebec institutions – Caisse de dépôt et placement du Québec, Fonds de solidarité FTQ, the Quebec government’s Investissement Québec and Power Corp. of Canada – family offices, and a smattering of venture capital firms.
The CPPIB investment is part of the pension giant’s recent strategy to build a diversified global portfolio of relatively small investments in innovative companies with potential to improve global health care, building on recent advances including genomic sequencing, gene editing and use of artificial intelligence to improve analysis.
Fusion acquires antibodies from other drug companies, linking them to radioactive particles to then kill cancer cells in select patients.
“We believe that Fusion has developed a safe approach to killing cancer cells," CPPIB said in a statement. Clinical success "could unlock the ability to rapidly build out a pipeline of highly effective and safe drugs to treat various cancers.”