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Accel-Rx and BDC partnership to grow life sciences companies

 

Canada has embarked on a bold and proven approach to turn the country’s $6-billion investment in basic health research into successful and well-managed companies that attract investment, generate profits and create jobs for Canadians.

The national effort sees five Centres of Excellence for Commercialization and Research (CECRs)—representing 70% of the country’s drug development pipeline—working together through a recently launched CECR to start and grow about 20 life sciences companies over the next four years.

“We are leveraging and building on CECRs that are already validating and advancing health technologies, which is the first big commercialization challenge. We are trying to complete the innovation continuum, and help the health sciences sector more quickly evolve into an economic generator,” says Natalie Dakers, President and CEO of the Accel-Rx Health Sciences Accelerator.

Canada has a strong track record of turning health discoveries into new businesses. However there are formidable challenges facing life sciences companies including access to capital, access to strategic partners and development of experienced entrepreneurs. Accel-Rx addresses these gaps specifically with a suite of support services that include business/investment development expertise and technology validation.  Accel-Rx will also help train a new generation of skilled entrepreneurs who, even if they fail the first time, can apply their experience to future start-ups.

“It takes an enormous amount of energy and resources to create and grow companies that are robust enough to attract investment and stay and grow in Canada,” adds Dakers. “Now we have Accel-Rx which will provide critically needed capacity and resources to these companies so they are better positioned for success, and primed for follow-on funding.”

Commercially-promising technologies and companies will be subject to rigorous due diligence, with three to four of the most promising ones selected each year to receive up to $1,000,000 in convertible debt funding from BDC Capital and Accel-Rx to be matched by other investors. Convertible debt is like a debenture that can be repaid or converted into equity, giving companies time to further develop their business and attract series A venture capital funding.

BDC’s Strategic Investments & Partnerships team supports many accelerators in a variety of sectors, but this partnership with Accel-Rx signals its first in the health sciences, a sector with inherent challenges including long product cycles, heavy infrastructure needs and high capital requirements.

“A key element that pulled us towards Accel-Rx is the fact that it’s a pan-Canadian collaboration utilizing strengths in existing commercialization centres. It’s not just one university doing something on its own in a silo. That strength really increases our chances of success,” says Dominique Bélanger, VP, Strategic Investments and Partnerships at BDC Capital.

BDC’s success in growing companies fast, combined with Accel-Rx’s strong ties to commercialization centres across Canada, made the partnership a natural fit, adds Bélanger.

“From our work with accelerators in different sectors, we’ve learned a lot about what works, what doesn’t and how to overcome pitfalls,” he says. “We’ve developed a highly disciplined model that significantly increases the likelihood of success for the companies involved in this program.”