Is Philanthropic Venture Capital the Key To Accelerating Innovation in Canada?
What happens when a premier VC with a proven track record of building companies that deliver innovative therapies partners with a respected philanthropic organization with an extensive network of top cancer researchers pioneering scientific breakthroughs? For Lumira Ventures, a leader in life sciences investing across Canada, and the Terry Fox Foundation, one of Canada’s most admired charitable organizations focused on cancer research, the answer is simple. You increase your chance of generating attractive investor returns, while fostering a stronger life sciences ecosystem and better health outcomes for patients around the world.
In April, Lumira and the Terry Fox Foundation announced a new collaboration. Together, they launched the Cancer Breakthrough Fund as part of a first-of-its-kind partnership in Canada. The new Fund’s mandate is to invest in companies led by mission-driven entrepreneurs who are working to deliver novel therapies to patients in the fight against cancer.
“The Terry Fox Foundation has been doing amazing work for decades, having raised more than $950 million and funded over 1,300 innovative oncology projects,” says Peter van der Velden, Managing General Partner at Lumira Ventures. “By partnering with them, we’re not only able to bring more capital to bear on the mission of finding novel treatments for cancer, but are also better positioned to direct that capital to where it will have the greatest impact.” The new Fund stands to benefit from the insights of a growing network of cancer researchers and oncologists (together, key opinion leaders or KOLs) that Lumira and the Terry Fox Foundation are working to build. With expertise across different cancer indications and treatment modalities, those KOLs will play an important role in vetting potential investment opportunities.
Approximately 40 percent of Lumira Ventures’ existing investments are focused on oncology companies across preclinical, clinical, and commercial stages. In addition to The Cancer Breakthrough Fund, which is seeking to raise C$30 million, Lumira is also actively raising a US$200 million Fund V. Importantly, three-quarters of the Cancer Breakthrough Fund’s allocations will be co-investments in cancer-related deals made in Fund V, while the remaining 25 percent will be allocated to early-stage cancer-focused Canadian companies.
For the Terry Fox Foundation, creating the new fund is an important way to meet a variety of key objectives. “First and foremost, it’s going to help create more solutions that actually reach patients and positively influence their treatments,” says Michael Mazza, the Foundation’s Executive Director. “But it’s also about creating a culture of innovation here in Canada. Too many of the ideas that are born in Canada wind up going south of the border. We want to help facilitate an ecosystem that values the importance of building life sciences startups here in Canada and making Canada a leader in developing cutting-edge cancer treatments. The allocations we make to early-stage companies will be critical to helping build out that ecosystem from the ground up.”
An Innovative Approach to Driving Innovation
Lumira Ventures has been investing in oncology-related companies for nearly two decades and has always been focused on finding cutting-edge modalities that result in transformative care. “We’re very proud of the work we have done, but are also always looking for new and better approaches to investing,” says Suman Rao, a Principal at Lumira. “We found one in our partnership with the Terry Fox Foundation. Collaborating with a philanthropic organization like this, where we work closely together and share fees, hasn’t been done before in Canadian venture, so it’s really exciting.”
For the Terry Fox Foundation, which had also long wanted to further increase its impact by creating a vehicle through which its donors and other institutions could invest in promising oncology-focused businesses, teaming up with Lumira Ventures made a lot of sense. “Cancer is the single biggest health threat in Canada and the second biggest around the world,” says Mazza. “The key to moving the needle in the fight against it is collaboration.”
For Mazza, Lumira was the obvious choice for that collaboration. “They’re the biggest player in Canada, generate strong investment returns, and are very focused on impact. Plus, every company we spoke to as part of our diligence had very positive things to say about them.”
By tapping into its vast network of donors, the Terry Fox Foundation aims to become the largest LP in the Fund. Meanwhile Lumira is actively looking to raise capital from impact-focused funds, family offices, and corporate strategic groups.
“In addition to the impact we think this new fund will have on accelerating breakthrough cancer treatments, it’s also filling an important gap in the Canadian venture system by introducing new capital sources,” says van der Velden. “There isn’t a built-in funding ecosystem for venture here like there is in the United States. That means we need to get more creative about bringing engaged and aligned capital to bear on the sector. If we could access even a fraction of the billions and billions of dollars on the balance sheets of healthcare foundations, it would be transformative to the life sciences sector.”
Another benefit of the relationship will be the synergies it creates. “Drug development and getting medicines to patients is very complex,” notes Rao. “By bringing all of the stakeholders together, that process will become a lot easier to the benefit of everyone.”
Philanthropic Venture Is Smart Venture
While the Cancer Breakthrough Fund was only announced a matter of weeks ago, the reaction from the community has already been very positive. “By partnering with the Terry Fox Foundation, we’re pioneering a new and innovative venture strategy here in Canada with the creation of a performance-driven fund that also has a mission to be impactful,” says van der Velden. “We think the potential here is enormous and hope it inspires other creative partnerships across Canada.”
“It’s a smart way to meet our shared objectives,” says Mazza. “We’re very good at funding discovery science, fostering the creation of new ideas, and helping to move them to trial. Meanwhile, Lumira has a knack for picking winners. It can identify the most promising ideas and then provide the support and expertise to grow them into successful companies. We think that’s a recipe for success that will not only pay off for investors, but also for the millions of people with cancer whose health and wellbeing depend on it.”
To learn more about the Cancer Breakthrough Fund, contact Michael Mazza (michael.mazza@terryfox.org) or Peter van der Velden (plv@lumira.vc).
