The exit of a life sciences company in British Columbia is highlighting the growing biotech ecosystem centred on Prince Edward Island.
Delta, BC-based Mazza Innovation Ltd. said Tuesday that it has been bought by Milwaukee-based Sensient Technologies, which produces fragrance and flavours, for an undisclosed price. Mazza, which specializes in extracting solvent-free bioactives from botanical sources, previously received investment from Charlottetown-based Natural Products Canada, or NPC, and was a member of the Emergence Bioscience Business Incubator, also based in Charlottetown.
The sale was the first exit for NPC, which received federal funding to support companies across the country that make products from natural sources. NPC said the proceeds will be used to fund other projects in the future.
“We are delighted to share in the success of Mazza’s acquisition and congratulate them on the tremendous value they have created in their business,” said NPC Chief Executive Shelley King in a statement.
Mazza has also been working with Emergence, which is a “virtual incubator” affiliated with the PEI BioAlliance. Emergence does not offer work space to its clients but supports them over the long-term with mentorship, networking, events and other forms of programing. Though most of its companies are based in Atlantic Canada, it also supports companies in other parts of Canada, as well as foreign businesses that are considering establishing bases in this country.
Martin Yuill, the incubator’s director, said his group is also encouraging some members based outside the region – such as Mazza -- to develop operations on the East Coast of Canada.
In a conversation and exchange of emails that gave a progress report on the organization, Yuill listed several other Emergence clients that have exited or raised capital in the past 15 months.
“The investment that these incubator clients have attracted will not only fuel their future growth but is a testament to the quality of the mentorship, business guidance, professional advice, and domain expertise they have received through the incubator program at all stages of their life cycles,” said Yuill.
An example: in January, Charlottetown-based Nautilus Biosciences Canada Inc., a marine biotechnology company, was acquired by Croda International Plc, a listed U.K. company that makes specialty chemicals. The price was not revealed.
Also in January, Canada’s Island Garden, a licensed medical marijuana producer based in Charlottetown, sold a majority stake to North Carolina-based tobacco leaf merchant, Alliance One International Inc. The acquisition is part of Alliance One’s efforts to branch out into higher-margin, fast-growing agricultural products such as cannabis.
Yuill said Canada’s Island Garden is “undergoing rapid expansion” as a result of the sale. The company is planning a two-phase expansion with Phase 1 involving a $35 million investment. Staff numbers are expected to grow from 20 today to between 150 and 200, he said.
In March, Charlottetown’s Dosecann Inc. agreed to be bought by Cannabis Wheaton Income Corp. of Vancouver for $38 million. Dosecann is developing a suite of cannabis-based health and wellness products for the current medical and future adult use cannabis market.
One of Emergence’s overseas clients, Animal Ethics (Pty) Ltd. of Australia, closed an $18.2 million investment from Dechra Pharmaceuticals PLC in April 2017 in exchange for a 33% stake and a global license to sell the company’s lead product Tri-Solfen. Yuill said Emergence is supporting Animal Ethics as it establishes a North American base in Canada – hopefully, he said, in Atlantic Canada.
Yuill also said there were two smaller deals in the past year that showed Emergence clients raising capital to build their operations: Island Water Technologies of Charlottetown closed a $500,000 funding round from Island Capital Partners and Natural Products Canada; and Charlottetown medical device company Stepscan raised investment from Saint John investment group East Valley Ventures.
Yuill said one reason these companies are attracting investment and buyers is they are part of a collaborative regional ecosystem with access to customized programs.
“Atlantic bioscience-based startup ventures are punching well above their weight,” said Yuill. “Not insignificantly, all of these successful Atlantic exits have been clients of the Emergence incubator program, having taken advantage of the program’s core service pillars.”
Disclosure: Emergence is a client of Entrevestor.