CEO's Blog

Good morning!

In my Feb. 24, 2009 blog post Economic Crisis Will Lead To More Efficient Healthcare , I made the prediction that our current, inefficient model of healthcare would be forced to change as a result of deteriorating economic conditions.

Recently, a scholarly paper by Christopher Truffer and colleagues, Health Spending Projections Through 2019: The Recession’s Impact Continues , presents compelling data to support my prediction from a year ago.

In the paper, the authors write “National health spending [in the U.S.] is estimated to have grown 5.7 percent and reached $2.5 trillion in 2009, despite a projected 1.1 percent decline in gross domestic product… This projected rate of escalation would represent the largest one-year increase in the health share of GDP since the National Health Expenditure Accounts (NHEA) began tracking health spending in 1960, and it reflects the severity of the recession that began in 2007.”

Interestingly, the authors see healthcare expenses rising from 17.3% to 19.3% of GDP by 2019. To arrive at this estimate, they modeled GDP as rising from $14.3 to $23.3 trillion by 2019, in other words a 5% growth rate of the economy, each and every year. By contrast, real economic growth in the U.S. has averaged just 2.9% a year over the past decade. Assuming a continuation of the past decade’s economic performance leads to a more realistic estimate of $19 trillion for the GDP in 2019. Thus, if healthcare continues to grow at the current pace, then healthcare expenses could actually be 23.5% of GDP by 2019.

Or worse. Suppose the U.S. experiences prolonged economic stagnation, perhaps similar to what Japan experienced from 1991 to 2003 when its economy grew at a mere 1.1% annually. Under that scenario, healthcare costs could rise to 28% of GDP, representing a staggering 62% increase in the share of GDP attributable to healthcare.

Few bets are safer than this one: one way or another, healthcare is going to get reformed. And the only way that reform can deliver the needed cost savings is to shift the focus of healthcare delivery from a critical care model to a pro-active, preventative model.

Good news, if you’re in the early disease detection business.

Yours truly,
John

Good morning!

Bill Pimco, co-founder of Pacific Investment Management (PIMCO), is one of the world’s largest mutual fund managers. In his February newsletter to investors, he had this to say about Canada: “…given enough liquidity and current yields I would prefer to invest money in Canada. Its conservative banks never did participate in the housing crisis and it moved toward and stayed closer to fiscal balance than any other country.”

He presents a very interesting chart to illustrate his concern, entitled “Ring of Fire”.

The chart depicts country risk as a function of both public sector deficit and public sector debt. On his chart, the dot representing Canada is coloured yellow, whereas the red-dotted U.S. is planted firmly within the “Ring of Fire”, alongside big debtor countries like Japan, Italy and Greece. Although Canada’s (public) debt-to-GDP is only slightly lower than that of the U.S., Canada has a much more favourable deficit-to-GDP ratio.

But recent research by McKinsey Global Institute and others reveals that a better determinant of country risk is total debt (public + private). And on this score, it’s not even close. While the total debt of the U.S. peaked at 375% and currently stands at a daunting 370% of GDP, the same measure in Canada is (only?) 245%.

So what other advice does Bill Gross share with investors in his letter? Again, in his own words, “the UK is a must to avoid. Its Gilts are resting on a bed of nitroglycerine. High debt with the potential to devalue its currency present high risks for bond investors.” (In case you’re wondering, the total debt-to-GDP figure for the U.K. is a staggering 470%.)

While it would be foolish (and uncharacteristic) for Canadians to brag, we can nevertheless breathe a collective sigh of relief, because the worst of the economic storm is likely to bypass us.

Yours truly,
John

Happy New Year!

By popular demand, this week marks my return to regular blogging. I know many of you are keenly interested in progress at Picomole. All I can say is it’s been a very busy time, but I’m happy with where things are heading.

I thought I’d kick things off in the New Year with a topic that’s near and dear to my heart: deal flows and trends. One of the tools we rely on at Picomole is our compilation of deal stats. What’s especially interesting is that we’re starting to see some new trends emerging, based on our survey of deals in the medical device and diagnostics industry.

First of all, M&A deal volume is up dramatically for Q4 2009, with no fewer than 33 deals announced, compared to just 13 for Q4 2008. Total aggregate size of the deals for which financials were disclosed increased to over $3.4 billion in Q4 2009 from $2.6 billion one year ago. No big surprise there, these data just demonstrate that economic activity is returning to normal levels in the medical technology sector.

When we looked at company financings during the same time periods, the biggest trends that we noticed were the dramatic shift in interest away from cardiovascular diseases (Q4 2008) to a focus on cancer (Q4 2009). In Q4 2008, we found 5 financing deals in cardiovascular disease, with 4 disclosing financials valued at $56.5 million total. During the same period, no important cancer financing deals were identified. In Q4 2009, we found just 2 financing deals in cardiovascular disease, valued at $2.3 million. Meanwhile, we tracked 4 cancer financing deals, with 3 disclosing financials valued at $57 million total.

While it’s tempting to leap to conclusions (e.g., cancer is in, cardio is out), we have to caution that there is a fair amount of granularity in the data. Also, past trends are often not reliable indicators of future direction. However, the data do suggest a significant change in priorities, and that may mean an even brighter future for cancer-focused medical technology companies.

Food for thought, as we embark on an exciting new year of deal-making!

Yours truly,
John

Good morning!

Healthcare reform in the U.S., widely recognized as essential, represents threats to some and opportunities to others. While considerable concern was expressed about the biotechnology sector at a recent investor forum I attended in New York, investors see medical devices in a more positive light.

Below is an excerpt from the remarks of Mr. Paul LaViolette, Venture Partner, SV Life Sciences, who participated in the keynote panel at Elsevier Business Intelligence’s ‘IN3 East’ Partnership/Investment Meeting for Medtech Execs held in Boston on June 23-25, 2009:

“Generally speaking, medical devices as a category are not likely to be targeted, and it is likely to be part of the solution, in my view. The less-invasive revolution is going to continue for a long time. It is a means by which to provide cost-effective care. There are huge categories of disease that can be positively affected by this. Large companies are not going to innovate, generally speaking. They are still going to need venture-backed vitality to drive the engine of growth in devices. So I think we need a little bit of stabilization in the concern about what the health care system reform will entail. I think devices as a general space will be healthy, and that the venture-backed model is going to be absolutely requisite in that paradigm.”

Mr. LaViolette also echoed other panelists regarding his perspective about the drought in medtech IPOs. “It is a lot harder to innovate diversification than it is to acquire it,” said Mr. LaViolette. “So if you talk to the leaders across the device industry – and I do that routinely – every one of them contends that they will be more active on the M&A side over the next three years than they have in the last three years. I think it’s nice to have an IPO market, but that’s not really a hugely vital part of the exit strategy for most categories of medical technology, and I don’t think that an IPO market for devices matters that much.”

Yours truly,
John

Good morning!

In an interview aired today with C-SPAN host Steve Scully, President Obama made a rather startling admission: the U.S. has run out of money. Of course, this isn’t really surprising to anyone with a passing knowledge of the state of U.S. finances. But it is nevertheless shocking words to be coming from a sitting president, and one that could further roil global markets in the days and weeks ahead.

A brief excerpt is below (emphasis added):

SCULLY: Yet, it all takes money. You know the numbers, $1.7 trillion debt, a national deficit of $11 trillion. At what point do we run out of money?

OBAMA: Well, we are out of money now. We are operating in deep deficits, not caused by any decisions we've made on health care so far. This is a consequence of the crisis that we've seen and in fact our failure to make some good decisions on health care over the last several decades.
So we've got a short-term problem, which is we had to spend a lot of money to salvage our financial system, we had to deal with the auto companies, a huge recession which drains tax revenue at the same time it's putting more pressure on governments to provide unemployment insurance or make sure that food stamps are available for people who have been laid off.
So we have a short-term problem and we also have a long-term problem. The short-term problem is dwarfed by the long-term problem. And the long-term problem is Medicaid and Medicare. If we don't reduce long-term health care inflation substantially, we can't get control of the deficit.
So, one option is just to do nothing. We say, well, it's too expensive for us to make some short-term investments in health care. We can't afford it. We've got this big deficit. Let's just keep the health care system that we've got now.
Along that trajectory, we will see health care cost as an overall share of our federal spending grow and grow and grow and grow until essentially it consumes everything. That's the wrong option.
I think the right option is to say, where are the game changers, the investments that we can make now that are going to reduce costs, even if they don't reduce them this year or next year, but 10 years from now or 20 years from now, we are going to see substantially lower costs.

A transcript of the full interview may be downloaded here.

My take is that this is a trial balloon floated on the Memorial Day long weekend (when relatively few viewers will have seen the Obama interview), perhaps to gauge reaction to this frank assessment of the seriousness of U.S. finances. The interview suggests the Obama administration will target healthcare cost reductions as part of its strategy for tackling the soaring debt. But even more interesting is Obama's willingness to find the "game changers", which could be interpreted to mean new disruptive technologies, like Picomole's LifeSens breath analysis technology.

As I've stated here before, the key to reducing healthcare costs while improving clinical outcomes is to shift the focus from crisis care to preventative care and early detection. Sounds to me like President Obama may be prepared to consider just that.

Yours truly,
John

Good morning!

Canadians may complain a lot about the global competitiveness of our businesses, but you shouldn’t be fooled by all the grumbling. In reality, the business environment here in Canada is among the best in the world.

According to the Economist Intelligence Unit, business information arm of The Economist Group, which in turn publishes The Economist magazine, Canada is actually ranked #4 in the list of countries with the most favourable business environments, after Denmark, Finland and Singapore.

By contrast, the U.S. is currently ranked #10, and there is little doubt it is about to tumble further down the list. Bogged down with enormous shortfalls at all levels of government, taxes in the U.S. are on their way up whether Americans like it or not. In what is just the most recent attempt to close a multi-billion dollar budget deficit, New York has leapt ahead of California in the dubious game of Who Has The Highest Taxes by announcing 88 new taxes . Expect to see many more stories like this from the U.S. in the months ahead.

My experience has been that there is relatively little red tape to running a business in Canada, and tax rates are lower here than they are for our friends South of the border. But don’t just take my word for it. According to the 2008 KPMG report Competitive Alternatives: KPMG’s Guide to International Business Location , Canada has the third lowest tax cost for businesses among 10 countries studied, with a total tax burden a whopping 21.2% lower than the U.S., which came in at #5 in this study. Moreover, under the industry category of Medical Devices, Canada ranks #2 in the overall cost index, trailing only Mexico.

Something to think about the next time you’re standing in a long line at Tim Hortons, or digging out after a winter storm in April.

Yours truly,
John

Good morning!

I hate to sound like I’m repeating myself (see my previous entry A Case of Overexposure ), but this just came across my desk. According to a recently-released report by the Canadian Centre for Policy Alternatives entitled “ What’s in a Scan? ,” Canadians may be putting themselves at risk with expensive screening tests based on medical imaging techniques:

“Controversial medical imaging procedures are being marketed and sold to Canadians as effective in screening healthy people for early detection of specific diseases, even though such screening is expensive, potentially harmful, and neither supported by the scientific literature nor recommended by professional bodies and regulators.”

The report goes on to quote Dr. Brian Lentle, former head of the Radiological Society of North America:

“Any radiation exposure is assumed to cause harm in older people beyond the reproductive age. The harm from screening procedures is radiation carcinogenesis – cancer induction. Such cancer induction is related to dose and dose-rate in a linear or linear-quadratic way that is explicit at high doses. There is no safe threshold that can be inferred. The evidence for harm at lower doses is less strong, but such harm may be reasonably assumed in the conservative practice of radiation medicine.”

Unfortunately, the report concludes that the public seems to be misinformed when it comes to the risks associated with some increasingly popular forms of medical imaging:

“People largely think scanning is safe (60% of our survey said that they thought there were no risks or safety issues associated with CT scanning or that they didn’t know of any) and erroneously believe (63%) that CT scanning exposes you to less radiation than conventional X-rays.”

At Picomole, we believe that the future of screening tests lies with a truly non-invasive and safe approach: analysis of exhaled breath samples. Our LifeSens breath tests are simple, fast, and do not expose the patient to any radiation risk whatsoever.

For more information, contact us today.

Yours truly,
John

Good morning!

A newly published report by the National Council on Radiation Protection & Measurements (NCRP) reveals that Americans are now being exposed to more than seven times as much ionizing radiation from medical procedures as was the case in the early 1980s. According to the NCRP report, the alarming increase in exposure was due mostly to the higher utilization of diagnostic imaging procedures.

The health risks due to radiation overexposure are not insignificant. A recent paper in the Journal of the National Cancer Institute concluded that women with BRCA mutations (a group that is at high risk for breast cancer), should not receive annual mammograms before the age of 35 due to the risk of developing breast cancer from cumulative radiation exposure. Computed tomography (CT) scans, increasingly used in the diagnosis of lung cancer, colon cancer, and many other diseases, expose patients to relatively high levels of X-ray radiation. A chest CT, for example, exposes a patient to about 8 millisieverts of radiation - 80 to 400 times the radiation exposure from a chest X-ray.

Moreover, not only do diagnostic imaging techniques like mammography and CT expose patients to potentially dangerous amounts of ionizing radiation, but the costs are spiralling out of control. A recent study by the U.S. Government Accountability Office (GAO) in July found Medicare spending on medical imaging doubled to about $14 billion a year between 2000 and 2006.

Picomole’s LifeSens technology does not expose patients to any radiation, and offers a fast and cost-effective way to potentially screen for diseases like breast cancer and lung cancer by measuring disease-specific biomarkers in exhaled breath. If a LifeSens breath test indicated the possible presence of a particular disease, then a suitable imaging technology could be used to ‘see’ the problem, as is being done now.

We believe our LifeSens breath tests can be an integral part of the solution for containing soaring health care costs. Let us know what you think!

Yours truly,
John

As an update on my blog entry from earlier today, I thought I would post the portion of President Obama's speech tonight that dealt specifically with healthcare spending and the need for reform. Sounds like he and I are on the same wavelength.

Here is the relevant section of that speech:

"For that same reason, we must also address the crushing cost of health care.

"This is a cost that now causes a bankruptcy in America every thirty seconds. By the end of the year, it could cause 1.5 million Americans to lose their homes. In the last eight years, premiums have grown four times faster than wages. And in each of these years, one million more Americans have lost their health insurance. It is one of the major reasons why small businesses close their doors and corporations ship jobs overseas. And it’s one of the largest and fastest-growing parts of our budget.

"Given these facts, we can no longer afford to put health care reform on hold.

"Already, we have done more to advance the cause of health care reform in the last thirty days than we have in the last decade. When it was days old, this Congress passed a law to provide and protect health insurance for eleven million American children whose parents work full-time. Our recovery plan will invest in electronic health records and new technology that will reduce errors, bring down costs, ensure privacy, and save lives. It will launch a new effort to conquer a disease that has touched the life of nearly every American by seeking a cure for cancer in our time. And it makes the largest investment ever in preventive care, because that is one of the best ways to keep our people healthy and our costs under control.

"This budget builds on these reforms. It includes an historic commitment to comprehensive health care reform – a down-payment on the principle that we must have quality, affordable health care for every American. It’s a commitment that’s paid for in part by efficiencies in our system that are long overdue. And it’s a step we must take if we hope to bring down our deficit in the years to come.

"Now, there will be many different opinions and ideas about how to achieve reform, and that is why I’m bringing together businesses and workers, doctors and health care providers, Democrats and Republicans to begin work on this issue next week.

"I suffer no illusions that this will be an easy process. It will be hard. But I also know that nearly a century after Teddy Roosevelt first called for reform, the cost of our health care has weighed down our economy and the conscience of our nation long enough. So let there be no doubt: health care reform cannot wait, it must not wait, and it will not wait another year." - President Obama in a live televised address to the U.S. Congress Feb. 24, 2009.

Good morning!

The current economic crisis is going to reshape our economy in profound and lasting ways likely not seen since the expansion of the populace into the suburbs following the end of World War II.

It’s obvious that many banks and other overleveraged corporations are going to fail in the next two or more years. The expansion of credit to dizzying heights that fuelled economic growth in recent years was unprecedented and unsustainable. If we truly believe in free market capitalism, we should accept that the best course of action for businesses with flawed business models is to let them fail. Government bailouts are not going to fix the problem. Bailouts will only reward failure, at enormous expense to taxpayers and future generations.

But while the media remains fixated on the ongoing train wreck of bad news affecting the financial world and now spilling over into the corporate world, destruction is only half of the story. The other side of the equation is the creation of businesses and even whole new industries that better meet our needs.

After the fact, after the crises are over, we always look back and marvel at how something new and indispensable seemingly sprang up from nothing. Of course, that isn’t really how it happens. The seeds had been planted long before. But by clearing out the dead wood from the forest, the fire created new growth opportunities for the young seedlings. The lesson is that crises have a unique ability to shift the natural order, and for those who know where to look, great opportunities can always be found in times of crises.

So what opportunities are going to be created from this economic crisis? I would argue that we need look no further than healthcare. Escalating healthcare costs were unsustainable in good times, and are definitely too expensive in bad times. Combined with an aging population that will require more care in the years ahead, the current model of healthcare delivery is going to have to change dramatically. Change of this magnitude isn’t going to be easy, but it is going to be forced upon us by the deepening economic crisis.

The only real option for improving the efficiency of healthcare delivery is to shift the focus from expensive crisis care to a model that emphasizes prevention and early detection. By any measure, a healthcare system that emphasized prevention and early detection would cost a fraction of the current system. But it would require among other things new, cost-effective technologies for early detection of diseases that place the biggest burden on the healthcare system: cancer, cardiovascular disease, diabetes, among others.

With its potential to be used as a low-cost non-invasive screening platform for a wide range of diseases, Picomole’s LifeSens breath analysis technology may be the ideal prescription for the healthcare system’s need for early detection. Contact us to find out more. Because the opportunity you’re looking for in these troubled times may be as simple as saying "Just breathe!"

Yours truly,
John

Good morning!

In some ways, I’m an old-fashioned kind of guy. I still enjoy reading newspapers, and I get a thrill out visiting the newsstand with its rows of magazines and newspapers from all over the world. But it’s undeniable that over the years, the quality of daily newspapers has steadily deteriorated. So much so that a few months ago, we actually cancelled our home delivery.

Nowadays, all newspapers present the very same content online, and it’s usually even available for free. But meanwhile an entirely new development, the blog, has quietly emerged as the premier source of news and analysis online. I thought I would share with you all some of my all-time favourite blogs:

Calculated Risk
An excellent finance and economics blog with an emphasis on real estate that consistently impresses me with the quality of its analysis and graphs. I’ve learned a lot from this blog.

Naked Capitalism
Another outstanding blog. Main contributor Yves Smith may be an “insider”, but he is highly respected in the blogosphere for his unvarnished commentary on the finance world.

Jesse’s Café Americain
This site combines high-quality writing and economic analysis with an aesthetic sensibility. Not to be missed: the mouth-watering food pictures on the left-hand side. Yum!!

Mish’s Global Economic Trend Analysis
Michael Shedlock (“Mish”) is an opinionated investment advisor who can be scathing in his attacks on public policy, but he’s rarely wrong and always worth reading.

Do you have favourite blogs that you’d like to share? Drop me a line and let me know!

Yours truly,
John

Update: The Baseline Scenario
A recent discovery, this is the blog of former IMF Chief Economist Simon Johnson, whose insights into the murky world of banking and finance are cogent and thought-provoking.

Good morning!

The December 2008 issue of Wired magazine has a very interesting article, called Why Early Detection Is The Best Way To Beat Cancer , that I highly recommend.

It turns out that if we find cancer early, 90 percent survive. If we find cancer late, 10 percent survive. In reality, the statistics aren’t quite that simple (e.g., some cancer types are worse than others). But basically, those are the odds on average.

While there has been a small increase in cancer survival rates over the past 30 years, this is mainly due to early detection, not new chemotherapies or treatments. And yet, despite these proven results to save lives and lower healthcare costs, organizations like the National Cancer Institute typically spend a paltry 8 percent of research funds on early detection. A notable exception is the Canary Foundation , where 100 percent of donations go to early detection research. The Canary Foundation should be applauded (and supported!) for their dedication to early detection and emphasis on results.

The peer-reviewed scientific research on cancer biomarkers found in exhaled breath is compelling, suggesting that early detection is both possible and practical with breath analysis. So why isn't breath analysis in routine use today? Simply put, existing gas analysis technologies are expensive, bulky and hard-to-use, making them unsuitable for clinical applications.

All that is about to change with LifeSens , Picomole's patient-friendly and cost-effective technology for clinical breath analysis. LifeSens is capable of detecting more than 90% of all known breath biomarkers, with results obtained in minutes.

Could a single breath change the course of your life? You better believe it.

Yours truly,
John

Good morning!

The latest Labour Force Survey (LFS) recently indicated that employment in Canada fell by 71,000 in November. These horrendous numbers will likely be repeated in the coming months if the federal and provincial governments do not take bold and appropriate actions. Unfortunately, the kinds of economic stimulus that have been proposed are unlikely to have the intended effect and should be resisted.

A specific idea that is frequently cited is massive spending on infrastructure. I don’t dispute that Canada’s crumbling infrastructure is in need of renewal. The evidence is all around us. However, the construction industry is not suffering. In fact, it continues to see employment growth. Moreover, as economist Stephen Gordon notes in his excellent blog, several recent tenders are receiving few or even no bids, as construction firms are currently overworked. Stephen Gordon ends with the question: “If new infrastructure projects are promised, who will build them?” Indeed.

I believe it would be far wiser to direct any economic stimulus at small businesses. Over half of private sectors jobs in Canada are created by small businesses. Small businesses, including start-up companies like Picomole, are the economic engine of this country. Any stimulus package that doesn’t target small businesses will not have the maximum impact.

My proposal is simple: declare a temporary tax holiday on capital gains resulting from investments made into small and medium enterprises (SMEs) during the first half of 2009. This would greatly encourage investments into SMEs, giving them much-needed access to capital and spurring economic growth. All governments would risk is the loss of potential tax revenues in the future, once the investments made during this 6-month window result in capital gains for the investors. But after all, the creation of capital gains for investors implies that the SMEs are succeeding (and likely employing more people), which is exactly what is needed right now to keep our economy from stalling further.

If you think a temporary tax holiday on capital gains is a good idea, then talk to your federal and provincial elected representatives. And let me know too.

Yours truly,
John

Good morning!

In an article in Saturday’s New York Times, Steve Lohr asks a provocative question: Do we overrate basic research?

Those who know me will not be surprised at my position. I have long argued that basic research is overvalued in our society. Instead, greater emphasis should be placed on extracting full value from the scientific principles we already have.

Picomole’s home province of Alberta is unfortunately a good example of a jurisdiction with misguided priorities. Flush with oil revenues, the province has spent billions supporting basic research in academic institutions. Until recently, however, there was little support in the province for companies attempting to bring new technologies to market. This was a short-sighted strategy, given that technology companies are efficient engines of wealth creation, and oil is a non-renewable resource.

The media, too, tends to overrate basic research. It routinely trumpets academic advances in news stories, despite the fact that such discoveries are typically several years and sometimes decades away from actually benefiting society. Meanwhile, coverage of exciting start-up companies on the verge of bringing groundbreaking products or services to market remains comparatively rare.

Even a modest shift away from current priorities of basic research toward applications and “midlevel innovation”, as described in Steve Lohr’s article, could end up being a helpful prescription for our ailing economy. Picomole insiders have heard this before: I have been consistently saying that greater success will come from being innovative in every aspect of our business (i.e., midlevel innovation) – not just technological innovation. Food for thought.

Yours truly,
John

Good morning!

I'm very pleased to announce that Picomole was recently honoured as the 2008 winner of the BioAlberta Emerging Company of the Year Award. The award was presented at the BioAlberta Annual Awards Gala held Nov. 25 at the Hotel Arts in Calgary.

BioAlberta's full press release announcing the award recipients is found here.

Yours truly,
John

Good morning!

I just got back from the Co-Investment Summit in Toronto, where Picomole was one of 25 presenting companies from across Canada. The goal of the Co-Investment Summit was to have the top companies that have received investments from various regional angel networks across the country make their pitches to the National Angel Capital Organization. Each company delivered a 10-minute pitch, including a 2-minute introduction by an angel “champion” from each company. Picomole investor M.S. kindly flew in from San Francisco to act as our angel champion.

At the end of a long and intense day of pitching and dialoguing, the investors were asked to rank the companies’ presentations. Picomole came in sixth place overall, and received an attractive glass plaque in recognition of this achievement.

Considering that this was a very competitive event, I’m happy with this outcome. Equally important, we got to tell our story to a fresh new audience, and made a lot of valuable new contacts as a result.

Yours truly,
John

Update: The National Angel Capital Organization has issued a press release including the list of the Top 10 Canadian Angel Capital companies. You can read it here.

Good morning!

Visitors to our web site will be getting the first glimpses today of our new design. We kept the theme of the child blowing dandelions, but we polished it up to give it a classy, timeless look. Beyond the new style, we're going to be adding fresh new content in the days and weeks ahead. So stay tuned, and let us know what you think!

Yours truly,
John

Good morning!

I’m very pleased to announce that Picomole has been nominated for the BioAlberta Emerging Company of the Year Award. The winner will be announced at the BioAlberta Annual AGM and Awards Gala, held on November 25, 2008 at the Hotel Arts in Calgary.

Alberta is home to more than 130 bioindustry companies, which together generate more than $800 million in annual revenues. BioAlberta is the central voice and the organizing hub for life sciences in Alberta. The organization has been advocating for, promoting and proactively facilitating the growth of Alberta's life science sector since 1999.

This is the second year that Picomole has been nominated for the Emerging Company of the Year Award.

Yours truly,
John

Good morning!

Last evening I was once again invited to speak to the entrepreneurs-in-training at the VenturePrize seminars. I take great pleasure in doing this because it’s an opportunity to give something back to a program that has meant so much to me, and to my company.

Since winning VenturePrize just over a year ago, private investment into Picomole has more than quadrupled, while awards and grants from government programs have doubled. In that same time period, our team has tripled in size. Media coverage about Picomole increased at least eight-fold since winning VenturePrize.

I believe these metrics provide tangible evidence of the value of the VenturePrize program. And while it’s undeniably true that winning the competition matters, much of the value of the program is derived simply from participating in the seminars and interacting with other entrepreneurs and leaders in the business community.

VenturePrize seminars cover a wide variety of topics relevant to entrepreneurs, including strategy development, marketing, finance, and even legal issues. Entrepreneurs well briefed on these important topics go on to build stronger, more competitive companies as a result.

It’s why I am, and will remain, a proud supporter of the VenturePrize business plan competition.

Yours truly,
John

Good morning!

I thought I would share with you a couple of excerpts from the newly-released report by Ernst & Young entitled “Pulse of the Industry: US medical technology report 2008” on the all-important exit:

“Mergers and Acquisitions (M&As) have long been integral to the medical technology industry’s business model. This is an industry where smaller companies develop innovations with an eye to being purchased by larger entities with manufacturing and commercialization capabilities. That tradition has continued in recent years with the medtech deal space remaining very active. […] There seems to be an ample supply of willing buyers, particularly with increased activity coming from non-traditional players such as mid-tier medtechs, diversified conglomerates and private equity funds.”

This finding is consistent with other recently-published research on the medical device sector. Successful medical technology companies continue to generate lucrative exit opportunities for their investors through vibrant M&A activity. Moreover, the reports confirm the much lower development costs and shorter time-to-exit for medical device companies vs. biotechnology firms.

Private medical device companies offer attractive return-on-investment (ROI), lower development costs, and shorter time-to-exit. Something healthcare investors should think about, as the public markets continue to disappoint.

Yours truly,
John