Investments in Canada's biotech Industry has reduced compared few years ago when nascent biotechnology sector commanded $100-plus share prices.

Investments in Canada's biotech Industry has reduced compared few years ago when nascent biotechnology sector commanded $100-plus share prices. According to Biennial Statistics Canada reports on biotechnology – in past the biotech companies have grown nearly 90% of which is devoted to health care between 1997 and its most recent in 2005. The revenues quadrupled and the number of firms swelled by greater than 50%.

According to a cross-section of players in the sector the quality of Canadian health care research has not diminished in recent years. According Michael Midmer, a Toronto-based associate with venture capital firm Bioscience Managers much of the health care capital coming into Canadian companies is already flowing up from the U.S.

Canadian investors who poured money into companies such as Angiotech Pharmaceutical Inc. and QLT Inc. – both of which once soared above $100 a share and now trade below $5, so low that QLT is now auctioning its assets. Also, the high-risk money that once funded biotech is now being poured into booming mining stocks.

Canada's pharmaceutical industry association, Rx&D, points to other factors, including the difficulty of succeeding in this business – the rule of thumb is that one in 10,000 new molecules makes it as a drug – and problems with the way drugs are bought and dispensed. The result is that companies on the verge of success see their market value wiped out, then get snapped up by others more capable of seeing their true worth.