Key Takeaways
- • Canadian life sciences companies raised $258 million in venture capital in the first half of 2026, down 39% year over year and the lowest first-half total in the series, according to RBC Thought Leadership.
- • Life sciences generated the highest 10-year gross returns of any sector and produced 44% of the value of Canada's 50 largest venture exits, yet only about 7% of capital allocated to Canadian venture funds went to life sciences funds.
- • Canada has not recorded a venture-backed biotech IPO since 2021, while 13 biotechs went public in the U.S. in the first half of 2026, leaving trade sales as the default exit.
- • The top 10 publicly traded Canadian biotech companies have an aggregate market capitalization of $13 billion, while Vertex Pharmaceuticals alone is worth about US$130 billion.
- • RBC recommends mobilizing domestic institutional capital for $50 million-plus rounds, sharpening R&D and IP incentives, and setting a goal of one Canadian life sciences company worth more than $10 billion within a decade.
Summary
An RBC Thought Leadership essay argues that Canada's biotech sector, despite a century-long record of world-changing science, remains underfunded in capital markets and has struggled to produce scaled companies. The piece notes that biotech was largely absent from discussions at a September gathering of major investors in Toronto, where AI, quantum and defence dominated the agenda.
The article cites strong historical returns alongside scarce capital. Life sciences delivered the highest 10-year gross returns among all sectors, and produced 44% of the value of Canada's 50 largest venture exits from just 22% of deals. Canadian life sciences companies raised $258 million in venture capital in the first half of 2026, a 39% decline year over year, while Radical Ventures' announced $4 billion AI fund is nearly 15 times that amount. Canada holds a 4% share of the global clinical trials market, representing $3 billion in annual direct expenditures, and has the highest number of ongoing clinical trials per capita in the G7.
The essay attributes part of the funding gap to the sector's risk profile. Only about 8% of drugs entering human trials are approved globally, development averages more than 10 years, and a single approved medicine can cost over US$1 billion including failures. Canadian healthcare VC funds average $150-300 million in size and focus on early-stage investments of $10-20 million. Domestic investors' share of therapeutics rounds falls from 42% in early stages to 24% in later-stage growth deals (2024), and international investors account for 76% of investors in rounds over $50 million.
Because IPOs have been absent, sales remain the primary exit route, and the long-term value of successful companies such as headquarters, jobs and royalties tends to accrue outside Canada. The essay cites Clarissa Desjardins, CEO of Montreal's Congruence Therapeutics and former head of Clementia, whose previous company was acquired by Ipsen of France for up to US$1.3 billion. The article also references the federal government's treatment of parts of the sector as "dual-use" alongside defence, and notes that Chinese drug candidates accounted for about a third of Big Pharma's licensing spending in 2025. RBC proposes three measures: mobilize domestic capital at scale, sharpen R&D tax incentives around intellectual property ownership, and set an anchor ambition for a $10 billion-plus Canadian life sciences company within a decade.
The article cites strong historical returns alongside scarce capital. Life sciences delivered the highest 10-year gross returns among all sectors, and produced 44% of the value of Canada's 50 largest venture exits from just 22% of deals. Canadian life sciences companies raised $258 million in venture capital in the first half of 2026, a 39% decline year over year, while Radical Ventures' announced $4 billion AI fund is nearly 15 times that amount. Canada holds a 4% share of the global clinical trials market, representing $3 billion in annual direct expenditures, and has the highest number of ongoing clinical trials per capita in the G7.
The essay attributes part of the funding gap to the sector's risk profile. Only about 8% of drugs entering human trials are approved globally, development averages more than 10 years, and a single approved medicine can cost over US$1 billion including failures. Canadian healthcare VC funds average $150-300 million in size and focus on early-stage investments of $10-20 million. Domestic investors' share of therapeutics rounds falls from 42% in early stages to 24% in later-stage growth deals (2024), and international investors account for 76% of investors in rounds over $50 million.
Because IPOs have been absent, sales remain the primary exit route, and the long-term value of successful companies such as headquarters, jobs and royalties tends to accrue outside Canada. The essay cites Clarissa Desjardins, CEO of Montreal's Congruence Therapeutics and former head of Clementia, whose previous company was acquired by Ipsen of France for up to US$1.3 billion. The article also references the federal government's treatment of parts of the sector as "dual-use" alongside defence, and notes that Chinese drug candidates accounted for about a third of Big Pharma's licensing spending in 2025. RBC proposes three measures: mobilize domestic capital at scale, sharpen R&D tax incentives around intellectual property ownership, and set an anchor ambition for a $10 billion-plus Canadian life sciences company within a decade.
Go deeper than the headline
Research every firm in this story, track the ones that matter and get the daily briefing — free for 7 days.