2020 brought a huge boom in health­care in­vest­ment. How big? SVB an­a­lysts have the record-break­ing an­swer

As the past year de­vel­oped, it be­came clear­er that 2020 was prov­ing to be mas­sive for the bio­phar­ma in­dus­try. But just how big did the sec­tor boom?

The fi­nan­cial gu­rus over at Sil­i­con Val­ley Bank at­tempt­ed to an­swer that ques­tion Thurs­day, as their top health­care ad­vi­sors re­leased their 2020 An­nu­al Re­port. All in all, SVB has the to­tal amount raised pegged at a stag­ger­ing $16.8 bil­lion, far eclips­ing the fundrais­ing record set in 2019 and mark­ing the biggest year-over-year growth in al­most a decade.

Jonathan Nor­ris

It’s al­so the fourth straight record year in health­care VC fundrais­ing, SVB man­ag­ing di­rec­tor Jonathan Nor­ris wrote in the re­port.

So what caused the boom? There were mul­ti­ple fac­tors that con­tributed, but it wasn’t that wells of cash sud­den­ly sprung up every­where. In fact, the num­ber of funds ded­i­cat­ed sole­ly to life sci­ences re­mained ex­act­ly the same last year as it did in 2019.

Rather, the me­di­an deal size in 2020 — $415 mil­lion — was near­ly dou­ble that of the me­di­an $217 mil­lion a year ear­li­er. Add to that a bustling IPO mar­ket, with 2020’s record class of 84 ex­its end­ing up about twice as valu­able as 2019’s, as well as strong M&A ac­tion and the in­dus­try had it­self quite the lu­cra­tive year.

Though Nor­ris did not in­clude SPACs in his fundrais­ing fig­ures, he not­ed that there was a large up­swing in such merg­ers, with VCs and hedge funds putting to­geth­er about $2 bil­lion in deals.

The biggest growth oc­curred dur­ing the third quar­ter of 2020, with a whop­ping 482 deals tak­ing place across all health­care sec­tors. That’s the most deals by far in any quar­ter in the last three years, with on­ly 2020’s fourth quar­ter clock­ing in above 400 deals dur­ing that times­pan.

There were al­so sig­nif­i­cant in­creas­es not just in Se­ries A rounds, but fol­low-on rounds as well by com­pa­nies like­ly to file for an IPO. On­col­o­gy led the way in both ar­eas: the field pulled in $1.3 bil­lion in Se­ries A fund­ing, up from $959 mil­lion in 2019, and $7.6 bil­lion in lat­er rounds and health­care deals, up from $6 bil­lion the pri­or year.

Nor­ris ad­di­tion­al­ly dis­cussed SVB’s glob­al health­care in­dex to track the per­for­mance of post-IPO com­pa­nies com­pared to the broad­er mar­ket­place. Cre­at­ed in 2018, the in­dex record­ed an over­all growth of 71% among these com­pa­nies, vast­ly out­per­form­ing the Nas­daq health­care in­dex (+31%) and S&P 500 (+15%).

These now-pub­lic com­pa­nies al­so out­per­formed the big tech quin­tet of Face­book, Ap­ple, Mi­crosoft, Google and Ama­zon, which com­bined for about 51% growth last year. Among the biggest win­ners this year were, un­sur­pris­ing­ly, firms work­ing on Covid-19 vac­cines: Mod­er­na, CanSi­no and BioN­Tech saw a col­lec­tive 508% in­crease.

Look­ing ahead to 2021, the folks at SVB don’t think the in­dus­try can quite keep up with the record-break­ing pace from 2020. But they still project a sol­id year like­ly to be in line with 2019’s $10.7 bil­lion fundrais­ing to­tal, with strong in­vest­ment pro­ject­ed to con­tin­ue both in Se­ries A and suc­ceed­ing rounds as well as a po­ten­tial 50 to 60 IPOs.

2023 Spot­light on the Fu­ture of Drug De­vel­op­ment for Small and Mid-Sized Biotechs

In the context of today’s global economic environment, there is an increasing need to work smarter, faster and leaner across all facets of the life sciences industry.  This is particularly true for small and mid-sized biotech companies, many of which are facing declining valuations and competing for increasingly limited funding to propel their science forward.  It is important to recognize that within this framework, many of these smaller companies already find themselves resource-challenged to design and manage clinical studies themselves because they don’t have large teams or in-house experts in navigating the various aspects of the drug development journey. This can be particularly challenging for the most complex and difficult to treat diseases where no previous pathway exists and patients are urgently awaiting breakthroughs.

Kristen Hege, Bristol Myers Squibb SVP, early clinical development, oncology/hematology and cell therapy (Illustration: Assistant Editor Kathy Wong for Endpoints News)

Q&A: Bris­tol My­er­s' Kris­ten Hege on cell ther­a­py, can­cer pa­tients and men­tor­ing the next gen­er­a­tion

Kristen Hege leads Bristol Myers Squibb’s early oncology discovery program carrying on from the same work at Celgene, which was acquired by BMS in 2019. She’s known for her early work in CAR-T, having pioneered the first CAR-T cell trial for solid tumors more than 25 years ago.

However, the eminent physician-scientist is more than just a drug developer mastermind. She’s also a practicing physician, mother to two young women, an avid backpacker and intersecting all those interests — a champion of young women and people of color in STEM and life sciences.

Endpoints Premium

Premium subscription required

Unlock this article along with other benefits by subscribing to one of our paid plans.

Pfiz­er and BioN­Tech look to toss Mod­er­na patent suit, call­ing claims 'unen­force­able'

Pfizer and BioNTech took a swing at Moderna’s Covid-19 patent claims in Massachusetts federal court on Monday, calling them “invalid,” “overbroad” and “unenforceable.”

The defendants also filed counterclaims against the Cambridge, MA-based biotech, seeking a dismissal of the case, recovery of court fees and an official judgment invalidating Moderna’s claims.

Moderna sued Pfizer and BioNTech back in August, alleging that the partners’ Covid-19 vaccine Comirnaty copied parts of Moderna’s vaccine technology patented before the pandemic, when it was developing an mRNA vaccine for MERS, another respiratory illness.

Gossamer Bio CEO Faheem Hasnain at Endpoints' #BIO22 panel (J.T. MacMillan Photography for Endpoints News)

Gos­samer’s Fa­heem Has­nain de­fends a round of pos­i­tive PAH da­ta as a clear win. But can these PhII re­sults stand up to scruti­ny?

Gossamer Bio $GOSS posted a statistically significant improvement for its primary endpoint in the key Phase II TORREY trial for lead drug seralutinib on Tuesday morning. But CEO Faheem Hasnain has some explaining to do on the important secondary of the crucial six-minute walk distance test — which will be the primary endpoint in Phase III — as the data on both endpoints fell short of expectations, missing one analyst’s bar on even modest success.

Endpoints Premium

Premium subscription required

Unlock this article along with other benefits by subscribing to one of our paid plans.

Rick Modi, Affinia Therapeutics CEO

Ver­tex-part­nered gene ther­a­py biotech Affinia scraps IPO plans

Affinia Therapeutics has ditched its plans to go public in a relatively closed-door market that has not favored Nasdaq debuts for the drug development industry most of this year. A pandemic surge in 2020 and 2021 opened the doors for many preclinical startups, which caught Affinia’s attention and gave the gene therapy biotech confidence in the beginning days of 2022 to send in its S-1.

But on Friday, Affinia threw in the S-1 towel and concluded now is not the time to step onto Wall Street. The biotech has put out few public announcements since the spring of this year. Endpoints News picked the startup as one of its 11 biotechs to watch last year.

Endpoints News

Keep reading Endpoints with a free subscription

Unlock this story instantly and join 154,100+ biopharma pros reading Endpoints daily — and it's free.

Bob Duggan, Summit Therapeutics co-CEO

Bounc­ing from ma­jor set­back, Sum­mit hands out $500M cash for can­cer drug — thanks to a loan from bil­lion­aire CEO

After hitting a dead end with Summit Therapeutics’ lead program, Bob Duggan has found the drug that he believes will usher into a compelling second act. So compelling, in fact, that it involves $500 million cash — and he’s taking money out of his own pocket to fund the deal.

Striking a partnership with Akeso Therapeutics out of China, Summit is bringing in a bispecific antibody that blocks both PD-1 and VEGF called ivonescimab. Akeso, which has a PD-1/CTLA-4 bispecific approved in China, has already taken ivonescimab into multiple clinical trials, including a Phase III in lung cancer.

Endpoints News

Keep reading Endpoints with a free subscription

Unlock this story instantly and join 154,100+ biopharma pros reading Endpoints daily — and it's free.

Jay Lichter, Arialys Therapeutics CEO (Avalon Ventures)

Scoop: Aval­on, MPM back new CNS biotech with sci­en­tif­ic chops from Astel­las

A preclinical central nervous system biotech is in the works in La Jolla, CA, and the drug developer has reeled in capital from a syndicate of investors, Endpoints News has learned.

Arialys Therapeutics filed incorporation documents in the Golden State last December and applied its name for trademark protection with the US Patent and Trademark Office the week prior to that. Paperwork with the SEC also outlines plans to offer up equity in exchange for $55 million.

Endpoints Premium

Premium subscription required

Unlock this article along with other benefits by subscribing to one of our paid plans.

Klick Health is lighting the way, literally, this holiday season to encourage connection for lonely seniors in long-term care facilities.

Klick Health an­nu­al hol­i­day spot­light se­nior lone­li­ness and the pow­er of con­nec­tion

Every year Klick Health leans into a cause for the holidays, and this year it’s highlighting the sometimes lonely season for seniors. So Klicksters, as employees call themselves, decided to brighten one nursing home community in hopes of inspiring others to do the same.

Klick literally lit up the Tony Stacey Centre for Veterans Care, a long-term care home in Toronto where 75% of residents receive no visitors during the holiday season. The agency brought staff and family along with lighting crews and musicians for a “Light the Way” event, creating a video of the experience debuting on Tuesday.

Endpoints News

Keep reading Endpoints with a free subscription

Unlock this story instantly and join 154,100+ biopharma pros reading Endpoints daily — and it's free.

Sum­i­to­vant sub­sidiaries En­zy­vant and Al­ta­vant merge in­to com­bined com­pa­ny

Two Sumitovant Biopharma entities are merging under one name, effective immediately.

Enzyvant Therapeutics and Altavant Sciences announced they have merged to form a singular entity focused on developing therapies for patients with rare diseases. The combined company will keep the name Enzyvant and along with clinical development will eventually include in-house manufacturing.

Bill Symonds, the current CEO of both Altavant and Enzyvant, is now CEO of the merged company.