The 50 most ac­tive biotech VC funds in 2017

With mon­ey flow­ing fast in­to the cof­fers of biotech ven­ture funds, it’s easy for cash-hun­gry com­pa­nies to imag­ine VCs are al­ways on the prowl for promis­ing bets. But new da­ta sug­gest some in­vestors are far more like­ly to gam­ble on new­com­ers than oth­ers.

Jonathan Nor­ris

Jonathan Nor­ris, the guy who puts to­geth­er Sil­i­con Val­ley Bank’s bi-an­nu­al and an­nu­al VC re­ports, no­ticed our own list of 100 VCs in bio­phar­ma didn’t tell the whole sto­ry. While VCs are mak­ing sev­er­al in­vest­ments per year, lots of those funds are chip­ping in ad­di­tion­al cash to their port­fo­lio com­pa­ny’s fol­low-on rounds. They’re dou­bling down on ex­ist­ing bets rather than seek­ing new deals. So Nor­ris looked at his own da­ta from 2017, took out all fol­low-on in­vest­ments, and just looked at deals in which VCs were mak­ing first-time in­vest­ments in com­pa­nies.

“Most every­one in­vest­ing in the sec­tor is say­ing they’re in­ter­est­ed in hear­ing from en­tre­pre­neur­ial com­pa­nies, but I think its hard to know which ones are ac­tu­al­ly mak­ing new in­vest­ments,” Nor­ris tells me. “Folks may be ac­tive­ly in­vest­ing, but maybe they’re on­ly mak­ing one in­vest­ment per year. Are you go­ing to be that in­vest­ment?”

You won’t be sur­prised to find Or­biMed, No­vo, and ARCH Ven­ture Part­ners at the top, but Nor­ris did note a few in­ter­est­ing find­ings. GV (for­mer­ly Google Ven­tures) sur­prised him by land­ing at num­ber 7 out of 50 of this year’s most ac­tive in­vestors.

“I thought (GV) was do­ing more on the tools side with big da­ta, AI, and an­a­lyt­ics – and that makes a lot of sense,” Nor­ris said. “But we’ve seen them jump on­to the scene on the ther­a­peu­tics side, and I think that’s fas­ci­nat­ing.”

This da­ta al­so shows the dom­i­nant role cor­po­rate funds played in 2017, mak­ing up 22% of our list of most ac­tive in­vestors. Nor­ris said cor­po­rate mon­ey has seen a sig­nif­i­cant rise since 2013, rank­ing “high­er and high­er” on his list each year. As large phar­ma­ceu­ti­cal com­pa­nies in­creas­ing­ly de­pend on small­er ven­tures to fill their R&D pipelines, these deep-pock­et­ed in­vestors are not to be ig­nored.

“A lot of peo­ple dis­count the cor­po­rates,” Nor­ris said. “But these folks are ag­gres­sive in the mar­ket and they’re not just do­ing fol­low-ons. A lot of these folks will do deals on their own. They’re at­trac­tive sources of cap­i­tal, and I think peo­ple for­get that some­times. You’d be re­miss if you’re not en­gag­ing with them.”

One group of in­vestors that ap­pear to be slow­ing their in­ter­est in bio­phar­ma are the crossover in­vestors, Nor­ris said. Since the peak of their in­ter­est in Q3 2015, these in­sti­tu­tion­al in­vestors (who large­ly play in the pub­lic mar­kets) have seem­ing­ly cooled to­wards life sci­ences.

Asthi­ka Goonewar­dene

Bloomberg In­tel­li­gence (Bloomberg’s re­search arm) does in-depth analy­sis of com­pa­nies and in­dus­tries, and se­nior biotech an­a­lyst Asthi­ka Goonewar­dene said his team has al­so no­ticed this trend.

“We’ve heard that one as well on crossover side,” Goonewar­dene said. “I wouldn’t say it’s dry­ing up, but in­ter­est does seem to have di­min­ished quite a bit.”

Nor­ris and Goonewar­dene both shared more in­ter­est­ing da­ta on in­vest­ing trends through­out 2017, and what they ex­pect to see next year — but we couldn’t squeeze it all in­to one re­port. You’ll be see­ing at least one more End­points re­port from these find­ings down the road.

I’m sure we’ll al­so be chat­ting about these trends at this year’s Biotech Show­case dur­ing JPM week (Jan­u­ary 8-10, 2018), where I’ll be join­ing a pan­el of biotech jour­nal­ists to dis­cuss what we’ve heard around the square. We’ll be chat­ting fi­nance trends and more on the last day, Jan­u­ary 10, at the Hilton San Fran­cis­co Union Square at 4:30 pm. See you there.

Norbert Bischofberger. Kronos

Backed by some of the biggest names in biotech, Nor­bert Bischof­berg­er gets his megaround for plat­form tech out of MIT

A little over a year ago when I reported on Norbert Bischofberger’s jump from the CSO job at giant Gilead to a tiny upstart called Kronos, I noted that with his connections in biotech finance, that $18 million launch round he was starting off with could just as easily have been $100 million or more.

With his first anniversary now behind him, Bischofberger has that mega-round in the bank.

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Francesco De Rubertis

Medicxi is rolling out its biggest fund ever to back Eu­rope's top 'sci­en­tists with strange ideas'

Francesco De Rubertis built Medicxi to be the kind of biotech venture player he would have liked to have known back when he was a full time scientist.

“When I was a scientist 20 years ago I would have loved Medicxi,’ the co-founder tells me. It’s the kind of place run by and for investigators, what the Medicxi partner calls “scientists with strange ideas — a platform for the drug hunter and scientific entrepreneur. That’s what I wanted when I was a scientist.”

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Chas­ing Roche's ag­ing block­buster fran­chise, Am­gen/Al­ler­gan roll out Avastin, Her­ceptin knock­offs at dis­count

Let the long battle for biosimilars in the cancer space begin.

Amgen has launched its Avastin and Herceptin copycats — licensed from the predecessors of Allergan — almost two years after the FDA had stamped its approval on Mvasi (bevacizumab-awwb) and three months after the Kanjinti OK (trastuzumab-anns). While the biotech had been fielding biosimilars in Europe, this marks their first foray in the US — and the first oncology biosimilars in the country.

Seer adds ex-FDA chief Mark Mc­Clel­lan to the board; Her­cules Cap­i­tal makes it of­fi­cial for new CEO Scott Bluestein

→ On the same day it announced a $17.5 million Series C, life sciences and health data company Seer unveiled that it had lured former FDA commissioner and ex-CMS administrator Mark McClellan on to its board. “Mark’s deep understanding of the health care ecosystem and visionary insights on policy reform will be crucial in informing our thinking as we work to bring our liquid biopsy and life sciences products to market,” said Seer chief and founder Omid Farokhzad in a statement.

Daniel O'Day

No­var­tis hands off 3 pre­clin­i­cal pro­grams to the an­tivi­ral R&D mas­ters at Gilead

Gilead CEO Daniel O’Day’s new task hunting up a CSO for the company isn’t stopping the industry’s dominant antiviral player from doing pipeline deals.

The big biotech today snapped up 3 preclinical antiviral programs from pharma giant Novartis, with drugs promising to treat human rhinovirus, influenza and herpes viruses. We don’t know what the upfront is, but the back end has $291 million in milestones baked in.

Vas Narasimhan, AP Images

On a hot streak, No­var­tis ex­ecs run the odds on their two most im­por­tant PhI­II read­outs. Which is 0.01% more like­ly to suc­ceed?

Novartis CEO Vas Narasimhan is living in the sweet spot right now.

The numbers are running a bit better than expected, the pipeline — which he assembled as development chief — is performing and the stock popped more than 4% on Thursday as the executive team ran through their assessment of Q2 performance.

Year-to-date the stock is up 28%, so the investors will be beaming. Anyone looking for chinks in their armor — and there are plenty giving it a shot — right now focus on payer acceptance of their $2.1 million gene therapy Zolgensma, where it’s early days. And CAR-T continues to underperform, but Novartis doesn’t appear to be suffering from it.

So what could go wrong?

Actually, not much. But Tim Anderson at Wolfe pressed Narasimhan and his development chief John Tsai to pick which of two looming Phase III readouts with blockbuster implication had the better odds of success.

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Af­ter a decade, Vi­iV CSO John Pot­tage says it's time to step down — and he's hand­ing the job to long­time col­league Kim Smith

ViiV Healthcare has always been something unique in the global drug industry.

Owned by GlaxoSmithKline and Pfizer — with GSK in the lead as majority owner — it was created 10 years ago in a time of deep turmoil for the field as something independent of the pharma giants, but with access to lots of infrastructural support on demand. While R&D at the mother ship inside GSK was souring, a razor-focused ViiV provided a rare bright spot, challenging Gilead on a lucrative front in delivering new combinations that require fewer therapies with a more easily tolerated regimen.

They kept a massive number of people alive who would otherwise have been facing a death sentence. And they made money.

And throughout, John Pottage has been the chief scientific and chief medical officer.

Until now.

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On a glob­al romp, Boehringer BD team picks up its third R&D al­liance for Ju­ly — this time fo­cused on IPF with $50M up­front

Boehringer Ingelheim’s BD team is on a global deal spree. The German pharma company just wrapped its third deal in 3 weeks, going back to Korea for its latest pipeline pact — this time focused on idiopathic pulmonary fibrosis.

They’re handing over $50 million to get their hands on BBT-877, an ATX inhibitor from Korea’s Bridge Biotherapeutics that was on display at a science conference in Dallas recently. There’s not a whole lot of data to evaluate the prospects here.

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Servi­er scoots out of an­oth­er col­lab­o­ra­tion with Macro­Gen­ics, writ­ing off their $40M

Servier is walking out on a partnership with MacroGenics $MGNX — for the second time.

After the market closed on Wednesday MacroGenics put out word that Servier is severing a deal — inked close to 7 years ago — to collaborate on the development of flotetuzumab and other Dual-Affinity Re-Targeting (DART) drugs in its pipeline.

MacroGenics CEO Scott Koenig shrugged off the departure of Servier, which paid $20 million to kick off the alliance and $20 million to option flotetuzumab — putting a heavily back-ended $1 billion-plus in additional biobuck money on the table for the anti-CD123/CD3 bispecific and its companion therapies.