MediCure Down for the count?

How many times have we Canadians in the Biotech area heard about a biotech company that was full of promise one day that suddenly took a dive the next. Most of our financings, especiallly on the "early startups" are based on providing JUST enough cash to get the critical experiments done. When they fail the whole company goes down the tubes.

For some years now I have been advocating another approach and that is to have SOME funding set aside to expand the "line" of possible things or "products" that the company could be seen to be developing. That way at LEAST some chance remains to survive the inevitable downs in this business.

While visiting Winnipeg yesterday I was confronted with yet another example of the wisdon of this approach. There is scarcel a better respected person than Bert Friesen but his company MediCure had a cliical trial fail and the company that stood at more than $2 a share the day before now traded at about EIGHT CENTS. Almost a year ago.

Now I fully understand the value of keeping a tight hold on the "purse strings" of an early company and may also see where the old stereotype of mistrust of "academic types"from the VC community comes from but I think that this view needs to be "matured" somewhat by the reality that the curret model of financing by Canadian VCs simply is not producing enough successes. Maybe it is time for another model?