Despite a booming economy and surplus cash, oil-rich Alberta can often prove to be a dry hole for life sciences companies thirsty for financing.

"Is life science getting the attention it deserves from investors? No, it is not. It's getting overshadowed by other investment opportunities in Alberta in oil and gas, and real estate, and I think opportunities are being missed," says Al Gourley, president of the consulting firm, Gourley and Associates.

"The great economy is a blessing, but it does mean this particular sector is competing against a very buoyant economy overall and these other terrific investment opportunities."

Gourley is also the chair of Edmonton's Deal Generator, a core program operated within TEC Edmonton - a joint venture between Edmonton Economic Development Corporation (EEDC) and the University of Alberta Technology Transfer Unit - that connects angel investors with entrepreneurs.

Dan Riedlhuber, Business Edge
BioNeutra Inc. CEO Jianhua Zhu and marketing VP Andy Dobson pour on a little Vitasugar at last week's investor forum.

But while Gourley says Deal Generator has made a difference, with total financing of about $10 million for technology-related companies, Alberta life sciences companies still have a bit of an uphill battle.

Introducing new products and technologies for applications such as agriculture, biotechnology, nutraceuticals, pharmaceuticals and cutting-edge medical devices, these companies require infusions of cash to get off the ground or in some cases to take their goods and services to the next level.

However, the news just got a little better. TEC Edmonton and Calgary Technologies Inc. (CTI) - the city's high-tech development agency - have unveiled the next stage in the Deal Generator program with its expansion into Calgary.

Now to be called Alberta Deal Generator, the organization will have offices in Calgary and Edmonton.

"CTI has joined forces with TEC Edmonton based upon TEC Edmonton's very successful track record in assisting early-stage technology companies in sourcing capital," says CTI president and CEO John Masters. "This project is now pan-Alberta, taking the best in-class practices of TEC Edmon'-ton and applying them here in Calgary."

The expansion won't change the program's focus, says Gourley, but there will be more money for companies.

"We have 121 investors in Deal Generator right now - Edmonton'-oriented investors - and we're targeting to add 100 Calgary investors by the end of the year, so it will really improve the access to capital."

One of those companies seeking access to capital is BioNeutra Inc. The 18-month-old Edmonton startup works to transform agricultural products such as cereals into sweeteners or prebiotics - healthy non-digestible food ingredients - in foods and beverages with its Vitasugar product line.

"The marketplace is looking for lower-calorie, higher-fibre ingredients, particularly of a sweet nature, to market to consumers who have a growing interest in reducing sugar intake and a growing awareness of the importance of fibre in their diet," says Andy Dobson, the company's vice-president of sales and marketing.

To achieve their goal, Dobson and company president and CEO Jianhua Zhu are hitting the financing trail in an effort to raise $2-$3 million. One of their stops has been the newly minted Alberta Life Technologies Investor Forum (ALTIF), which held its inaugural edition in Edmonton last week.

ALTIF, which will take place in Calgary next year and then alternate each year between the two cities, aims to allow companies in the life-sciences sector to network with investors from across Canada. Companies involved can range from startups to mature ventures.

"The conference is a timely opportunity," Dobson says. "We started looking for funds in the last year. The sense I get is that if we were in Ontario or Quebec, it would be easier. It could be because people (here) are too focused on oil and gas."

Gourley agrees the prominence of the energy industry has made it harder for other sectors to grab a share of the limelight.

"When you go further afield and think of investors outside Alberta, they would not immediately see Alberta as a hotbed of medical (or other) technology opportunities because of the dominant image of the province as a centre of oil and gas," says Gourley.

"But the other side of the coin is there are some investors that are becoming aware of the opportunities and they are starting to pay attention."

That attention is becoming more evident, according to EEDC president and CEO Allan Scott, who says things are looking brighter in the life sciences arena.

"There are $1.6 billion of life sciences projects under way now in Greater Edmonton alone," says Scott, adding that there are 1,200 employees working in Alberta's biotech companies.

But there still are concerns that need to be resolved, primarily related to funding.

"Venture capital - that's the one area that we absolutely have to work on. It may be the one hole we have to work on in a pretty attractive environment here," says Scott.

Michael Welsh, president of Edmonton-based ALMASA Capital Inc., agrees it's hard to find angel investors to put the money into Alberta's early-stage life sciences companies. While he is hopeful ALTIF will help to put the spotlight on the sector, he notes the province doesn't have the venture capital funds that could be found if a company were based in Ontario or Quebec.

"We've got some brilliant people who love Alberta and the (provincial) government has got to get onboard and invest in some of the ingenuity that is in Alberta," says Welsh, who helped organize this year's forum.

Don Back, another ALTIF organizer, moved to Edmonton from Winnipeg because of the growing strength of life technologies in the province.

"I've been working in the market for the last year with the objective of raising a fund for investment in life sciences," says Back, a former chief scientific officer of the Western Life Sciences Venture Fund LP, headquartered in Winnipeg.

But Back acknowledges that there's been very little investment capital available to life technology companies in the province. "That's starting to change, but if we go back 10 years ago, it was virtually impossible to get startup money and it's only a little better today."

For Back, the answer is getting the province to play a leadership role.

"When you're outside of the province talking about people investing in the province of Alberta, the first question that I'm asked is, 'Does the province have any investment in this sector?' - because the rest of Canada and the United States perceives that Alberta is a very wealthy province, and if Alberta is not investing in this sector, why should they invest? It creates a catch-22-scenario," says Back.

Having one of Alberta's life sciences companies score a major breakthrough would also help the sector, says Gourley.

"We haven't had our health investors hit that bases-loaded home run with a health technology investment," says Gourley.

However, Edmonton-based CV Technologies - known across the country for its lead product COLD-fx - is already a star player for the life sciences team, says Gourley. "They're having such a bang-up year, their revenues are up and their earnings are up."

Gourley is also optimistic when it comes to the provincial government.

"I'm not too negative on the (provincial) government, frankly. I think we are seeing that they're paying more attention," says Gourley.

"It comes back to the overshadowing issues: Albertans are making money; we have high employment, so conditions are good. So from a politician's standpoint, it's what's the problem? People are working. We're making money.

"It doesn't have the sense of urgency that this is planning for (the employment of) future generations."

Provincial officials say they're aware of industry concerns in the life sciences sector.

"Two years ago there was a life science strategy approved by the Alberta Science and Research Authority that is now being translated into the Alberta Life Science Institute and a life sciences policy," says Richard Perry, director of biotechnology and pharmaceuticals at Alberta Innovation and Science.

While details are still being finalized, Perry says the intent is to have the institute set up this year.

Brad Guthrie, branch head, life sciences industry for Alberta Innovation and Science, agrees there is a common perception Alberta needs more access to investment capital, including the life sciences.

However, he adds, "you also do hear from investors that there is money available for the very best Alberta companies, but that there are many more (companies) that look for cash than those that rate the very best."

"But those who aren't can polish and strengthen their management team and improve their technology so it less risky ... and show that there is a market big enough to make them a winner and provide a return on the investment."

(Laura Severs can be reached at laura@businessedge.ca)