2013 TSX Venture 50

ICO’s key opportunities in eye disease therapies


iCo Therapeutics Inc. started off like most small businesses do—with money from family and friends. Andrew Rae, the company’s co-founder, president and CEO also kicked in some cash. While other high net-worth investors would contribute to the company, it wasn’t until 2008, after it listed on the TSX Venture Exchange, that the business really took off.

This biotechnology company, which started in 2005, is primarily focused on testing drugs that treat eye diseases, such as diabetic-related blindness. It doesn’t make the drugs itself; it leases medicines from companies, conducts phase 1 and 2 testing, and then it leases the drug to a larger business to conduct phase 3 testing. The hope is that the bigger medical business will sell these drugs to the mass market. “If we’re in a 4×100 relay of drug development then what we’re doing is the second and third legs of development,” says Rae. “We hand it back to a bigger player who’s more capable of finishing the race.”

The company had a drug ready to test—ISIS Pharmaceutical leased one of its discoveries to iCo for equity instead of cash—but it needed money to finance the clinical trials. It raised roughly $10 million after it listed, despite going public just a few months before markets plummeted. While Rae admits it was tough timing—its share price did fall during the worst of the crisis—growing investment demand for new biotech businesses helped the stock price recover in 2009.

“I’m confident that a good chunk of the capital we had raised, would not have been raised if we hadn’t gone public,” he says. “There’s an absence of venture capital money in Canada, and it’s quite pronounced for biotech, so the venture exchange provided an alternative source and investor base.” He doesn’t see this dynamic changing anytime soon. “We’re pretty fortunate to have a vehicle like this,” he says.

The company is currently in phase 2 testing of a drug that could one day treat diabetic macular edema. If all goes well, testing will end at the end of this year. He hopes he can lease it to a larger company in 2014. Rae doesn’t think iCo Therapeutics, which saw its share price climb 222% last year and its market cap rise by 318%, will have to revisit the market in the near future, but making the Venture 50 list is sign that people believe in the company’s future.

“We’re not taking any shortcuts—we’re doing it right,” he says about his work. “This is acknowledgment that the company is building long-term value.” It also proves that the company is doing something different in what’s a fairly small ophthalmology space. “It’s like cornering the best real estate,” he says. “You have limited opportunities for those key pieces of land. This shows, though, that our ‘land’ has a lot of potential.”


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