Big Data Is Driving Big Healthcare Investment Opportunities in Canada

30 Mar

By Sarah Mortimer, MaRS Discovery District

A growing revolution in healthcare is fueling innovation and increased government spending in the sector, while opening up new opportunities for investors.

Today, thanks largely to mobile devices, people are collecting more personal health information than ever before, including family medical histories, symptoms, biometric data, and food and drug intake. Experts have taken to calling this wealth of information “big data” or the “quantified self.”

This democratization of the healthcare sector—where both doctors and patients are involved in the healing process—is driving increased spending in the system, which, in turn, is fuelling new health innovations and greater interest in the sector from venture capitalists.

According to the Canadian Institute for Health Information, health spending in Canada was expected to reach $228 billion—or $6,299 per Canadian—in 2016, signifying the government’s strong commitment to advancing this sector. And this is just the tip of the global iceberg. Between 2015 and 2020, the world’s major regions are expected to see healthcare spending increase from 2.4% to 7.5%, according to a recent healthcare report by Deloitte.

“Canada has always had a very strong ecosystem for driving innovation in health sciences, particularly in medical imaging, equipment and devices,” says Dan Mathers, investment director at the MaRS Investment Accelerator Fund. “The vision here is big.”

Toronto in particular is perfectly poised to leverage the investment trend. The city’s infrastructure includes all the necessary pillars for a healthcare pipeline — from leading hospitals and medical centres to innovation hubs and research facilities. In fact, some of the world’s leading medical institutes call Toronto home, such as Mount Sinai Hospital and the Princess Margaret Cancer Centre, among many others. According to the Government of Canada, “over 50% of Canada’s life sciences companies are located in the Toronto region, and the Toronto biotech cluster is the largest in Canada.”

Much of Toronto’s healthcare epicentre is located in the city’s Discovery District, a 2.5-square-kilometre region in the heart of its downtown core. Not only does the Discovery District represent the greatest concentration of research centres, startup incubators and other business development services in all of Canada, but it’s also the world’s densest geographical area for research.

With such an active life sciences scene, it’s not surprising that Toronto continues to attract and retain a growing number of high-growth startups working in some of the hottest healthcare segments.

“Investors are beginning to take note of Toronto as an under-tapped market for cutting-edge biotech and life sciences startups,” says Ying Tam, acting managing director of health venture services at MaRS. “Events like next week’s RESI on MaRS conference and MaRS HealthKick will give international investors an opportunity to meet with founders and scout the region’s most promising emerging health technologies.”

“The recent increase in the size of investments in the Toronto market reflects the quality of science and innovation in fields such as regenerative medicine and neurosciences,” says Mary Haak-Frendscho, a venture partner at Versant Ventures and the CEO of Blueline Bioscience.

Venture capital and private equity firms from around the globe are also being drawn to Canada’s medical device and equipment sector, which ranks ninth in a global context, according to Global Affairs Canada. The same government report estimates the sector’s worth to be $6.8 billion, with additional exports totalling $1.9 billion.

“There’s a lot of activity here,” says Mathers, referring to successful medical device companies such as Perimeter Medical Imaging, Synaptive Medical, eSight and Intellijoint Surgical.

All in all, the boundaries between the possible and impossible are constantly being redefined in ground-breaking ways—especially in Ontario. In the words of Dan Mathers, Toronto’s healthcare scene presents the “ability to turn what was previously science fiction into real-life solutions.”

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