VIDEO: Bloom Burton & Co. CEO Brian Bloom on Which Biotech Companies to Invest in

Bloom Burton & Co. is Canada’s only healthcare investment bank. CEO Brian Bloom talks to James about their investment in research and development, which include biotech companies focused on testing new ideas and curing disease. 

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TRANSCRIPT:

James West:     Brian, thank you for joining me today.

Brian Bloom:     My pleasure. Thanks for having me.

James West:     Brian, Bloom Burton is best categorized as Canada’s only real biotech focused independent investment bank. Why don’t you give me a quick overview – what is it that you guys do?

Brian Bloom:     We’re biotech healthcare. So we are, as you mentioned, Bloom Burton Securities, or IIROC dealer, as a subsidiary of Bloom Burton & Co. We are the only healthcare-specialized investment bank in Canada. We have about just shy of 25 people at our firm. Almost all of us are medical and scientific and pharmaceutical specialists; we have physicians and scientists and people who have worked in industry before, and we provide a range of services for both investors and companies to help them grow and make money in the health care sector.

James West:     So you also provide some level of management advisory input to the companies that you finance. You help them find management, and I’ve seen you even bring companies together for ultimate mergers.

Brian Bloom:     Yeah. So we have a broad range of services, all of which that work together. We raise capital for companies, we’re the leading merger and acquisition advisor for health care companies in Canada. We publish stock research, we do scientific consulting, we do direct investment through the Bloom Burton funds, and finally, we create and incubate companies from scratch.

James West:     Fantastic.

Brian Bloom:     All of the above.

James West:     Okay. Why don’t you give me a few examples of some recent transactions that you’ve been part of?

Brian Bloom:     Sure. I’ll start with… the most important work that we do, in my opinion, is on the research and development side. So you actually mentioned biotechnology. Of course we do biotechnology, which is generally discovery and new ideas being tested to try and cure disease and do important things. But we also work in pharmaceuticals, generics, medical devices, diagnostics, clinics and other services, and health care software – so, all areas.

But the company I should start with is called Medicenna. It’s MDNA on the Toronto Stock Exchange, and they have a very important drug in clinical testing for brain cancer. So they have acquired a drug that they are now developing in a Phase II trial for patients with glioblastoma – very intractable, and very difficult to treat tumor that can be treated with chemotherapy, can be surgically removed or attempted to be, but invariably, these tumors come back, and they’re very angry, and they’re very aggressive when they come back. Almost everyone who has this tumor unfortunately dies.

So we believe that Medicenna and its CEO, Fahar Merchant, have a very important asset, and they started their clinical trial a few months ago. The data will be out in different phases. The first stage of data will be to see whether tumors are shrinking, in the Spring of 2018, and then hopefully we’ll see a strong survival benefit at the end of 2018.

James West:     Okay. From an investor’s perspective, especially the retail investor who might not have a great depth of experience or scientific background, they’re attracted to life sciences investments because of the explosive potential of these drug developers upon a successful trial and subsequent commercial adoption. If the opposite happens, a lot of the time these stocks crash and burn, but they ultimately resurrect themselves and pursue a different direction or make a modification to their program. So in terms of what’s happening with Medicenna, is that basically the same kind of profile that investors are going to be subjected do – it’s a do or die situation based on the outcome of this?

Brian Bloom:     Yes.

James West:     Okay.

Brian Bloom:     Medicenna actually has a deep pipeline of other drugs, but of course, the majority of their value, it will be a hero or close to a zero depending on the data from the first trial.

Now corporately, they can pick up the pieces upon a failure, or upon a success they could raise hundreds of millions of dollars and then invest in other assets to become a more diversified company. But as of right now, for the next 12 months, this is a pretty binary bet. So this will either go up multiple folds logarithmically, or it could go to very low.

So the way to play these is certainly to buy a basket – hopefully a Bloom Burton recommended, or other expert-recommended stocks, so that if you are going to invest in R&D stage companies, you’re not putting all your eggs in one basket. It’s nice to own three of these, four, five, six, and certainly we like other pre-revenue stage companies or R&D companies in Canada, like Trillium, like Bellus and others, that, along with Medicenna, could make a nice basket.

James West:     Sure, okay. So besides the biotech side, you also have branched out more recently into, well, I guess cannabis is now a medical application, and you have actually begun to support CannTrust.

Brian Bloom:     Only one company. So I wouldn’t say – yes, we have branched out into medical marijuana, but because we take our responsibility as champions of true medical science very seriously in Canada, and you know, we don’t believe that the medical marijuana companies are largely, seriously medical companies. Of course, just like vitamins or supplements or when you take your Vitamin C, these kinds of companies can have wellness and medical value, but they’re valued mainly for their future in being able to dominate a much larger recreational market.

So with all of that as a preview, or a preamble, yes, these companies are somewhat medical companies. They’re not serious medical companies, but the most serious of them all, in our view, is CannTrust. Their whole management team comes from the pharmacy and the pharmaceutical industry. They’re the only company that’s partnered with a serious pharma; in this case CannTrust’s with Apotex, the largest pharmaceutical company in Canada.

So CannTrust, we raised tens of millions of dollars for them privately. They recently became a publicly traded company; it’s TRST on the CSC exchange, and I believe they just peaked over $4 per share. And you know, this whole market is going to be ultimately an oligopoly of a few dominant players. I think ten years from now, there will be very few, very large companies, which will probably include ones that are the leaders today, like CannTrust, Canopy, MedReleaf and others.

James West:     How can individual investors access Bloom Burton’s intelligence and research?

Brian Bloom:     Sure. So we are very active in social media, talking not stock-picking, because our research and our work is generally institutional focused, so we don’t distribute our research directly to retail investors. But we do speak thematically about the health care sector at our investor conference, at our events, online on social media about disease areas or themes that investors can pay attention to. And of course, we do talk about specific ideas on forums like this, and certainly we’re very grateful for the exposure of you and The Midas Letter.

James West:     Well, I’m grateful for you joining us today. Thank you very much for coming!

Brian Bloom:     Very good. Thanks, James.

Original article: VIDEO: Bloom Burton & Co. CEO Brian Bloom on Which Biotech Companies to Invest in

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