The Terry Fox Foundation is getting into the venture capital business as it expands its efforts to fight cancer.
The foundation, named for the runner who died in 1981 after a recurrence of cancer cut short his Marathon of Hope, funds basic cancer research with proceeds raised from annual events across the country and other donations. During its last fiscal year, the foundation raised $39.5-million and distributed $25-million. The foundation and its research institute also collaborate with funders, researchers and 40 institutions in a national network that promotes personalized precision cancer care.
Now the foundation is looking to expand into the commercial realm. On Thursday, it is set to launch the Cancer Breakthrough Fund in partnership with Canadian life-sciences venture firm Lumira Ventures. The fund, which has a goal of raising US$25-million from investors, will back startups seeking to develop cancer therapies into marketable products.
“We think there will be a lot of new ideas in the next decade, and we want to ensure there’s capital available for those entrepreneurs to commercialize ideas and that patients receive those benefits,“ said foundation executive director Michael Mazza. “We see this as a critical component in the Canadian market necessary to elevate ideas into solutions.”
Investing in early-stage life-sciences companies is risky: Few therapies make it from lab to market. But Canadian life-sciences venture capitalists have delivered stronger overall returns than their peers in other sectors. Several domestic companies have sold for $1-billion-plus or achieved that valuation on public markets in recent years, including Lumira-backed Aurinia Pharmaceuticals Inc., Zymeworks Inc. and Fusion Pharmaceuticals Inc.
Several U.S. philanthropic organizations have had success backing ventures. The Cystic Fibrosis Foundation in 2014 sold royalties from its investment in a company that developed Kalydeco, the first approved treatment for the disease, for US$3.3-billion. That enabled it to invest US$225-million a year and fund other ventures. The American Cancer Society’s BrightEdge fund had backed 16 for-profit companies developing cancer therapeutics, diagnostics, devices and technologies by the end of 2023.
Juvenile Diabetes Research Foundation volunteers, meanwhile, created the T1D Fund in 2016, funded by US$100-million-plus in donor gifts. As of March, 2024, it had invested US$110-million in 43 companies that attracted US$800-million more in private capital, returning more than US$100-million to fund further investment. Portfolio company Aspect Biosystems of Vancouver is developing 3-D printed biotissues.
The philanthropy-venture model is novel in Canada and “a transformative approach to fulfilling the mission of bringing products to patients and returning capital,” said Peter van der Velden, managing general partner of Toronto-based Lumira. “Nobody has done this in this country. It’s about time. This is a collaboration between two leading stakeholders who have very different approaches to how they support the ecosystem collaborating for a common goal, which is to drive better outcomes for patients” and address a lack of domestic risk capital.
Lumira will manage the fund, which is expected to make 13 investments. It will invest one-quarter of proceeds in early-stage Canadian cancer treatment developers and co-invest the rest in more advanced cancer companies alongside a separate Lumira fund. The latter fund, Lumira’s fifth general investment vehicle, aims to raise US$200-million to back companies in Canada and the United States. The larger fund expects 40 per cent of investments to be in the cancer field.
Meanwhile, the foundation will help find investors for the Cancer Breakthrough Fund in one of two ways: It will approach larger donors to make directed contributions to the foundation, which in turn will aggregate the proceeds and invest as a limited partner, or LP, in the fund. Alternatively, donors can invest in the fund, as long as they contribute the minimum $250,000. The foundation is also assembling several cancer experts to advise the fund.
Either way, the foundation will share in the fund economics: Lumira pays one-quarter of its standard annual management fee of 2 per cent of assets under management to the foundation. Likewise, the foundation will receive one-quarter of Lumira’s 20-per-cent share of profits the fund generates after returning invested capital to LPs along with their 80 per cent of gains.
Mr. Mazza said he’s not worried about the foundation cannibalizing existing donations. “We’re very conscious of making this additive,” he said. “The majority of our donors will continue to fund all the good basic science programs.”
The early-stage life-sciences sector has been in a downturn for three years, and the administration of U.S. President Donald Trump has created uncertainty by freezing medical research grants and slashing staff at the Food and Drug Administration. Mr. van der Velden said he wasn’t concerned. “We’re not building companies for tomorrow, but for the next decade,” he said. “This stuff will get sorted out. There will be a functional FDA, there will be a functional regulatory environment.”
