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.

Pfiz­er’s Doug Gior­dano has $500M — and some ad­vice — to of­fer a cer­tain breed of 'break­through' biotech

So let’s say you’re running a cutting-edge, clinical-stage biotech, probably public, but not necessarily so, which could see some big advantages teaming up with some marquee researchers, picking up say $50 million to $75 million dollars in a non-threatening minority equity investment that could take you to the next level.

Doug Giordano might have some thoughts on how that could work out.

The SVP of business development at the pharma giant has helped forge a new fund called the Pfizer Breakthrough Growth Initiative. And he has $500 million of Pfizer’s money to put behind 7 to 10 — or so — biotech stocks that fit that general description.

Endpoints News

Keep reading Endpoints with a free subscription

Unlock this story instantly and join 83,100+ biopharma pros reading Endpoints daily — and it's free.

Bris­tol My­ers is clean­ing up the post-Cel­gene merg­er pipeline, and they’re sweep­ing out an ex­per­i­men­tal check­point in the process

Back during the lead up to the $74 billion buyout of Celgene, the big biotech’s leadership did a little housecleaning with a major pact it had forged with Jounce. Out went the $2.6 billion deal and a collaboration on ICOS and PD-1.

Celgene, though, also added a $530 million deal — $50 million up front — to get the worldwide rights to JTX-8064, a drug that targets the LILRB2 receptor on macrophages.

Endpoints News

Keep reading Endpoints with a free subscription

Unlock this story instantly and join 83,100+ biopharma pros reading Endpoints daily — and it's free.

Leen Kawas, Athira CEO (Athira)

Can a small biotech suc­cess­ful­ly tack­le an Ever­est climb like Alzheimer’s? Athi­ra has $85M and some in­flu­en­tial back­ers ready to give it a shot

There haven’t been a lot of big venture rounds for biotech companies looking to run a Phase II study in Alzheimer’s.

The field has been a disaster over the past decade. Amyloid didn’t pan out as a target — going down in a litany of Phase III failures — and is now making its last stand at Biogen. Tau is a comer, but when you look around and all you see is destruction, the idea of backing a startup trying to find complex cocktails to swing the course of this devilishly complicated memory-wasting disease would daunt the pluckiest investors.

Fangliang Zhang, AP Images

UP­DAT­ED: Leg­end fetch­es $424 mil­lion, emerges as biggest win­ner yet in pan­dem­ic IPO boom as shares soar

Amid a flurry of splashy pandemic IPOs, a J&J-partnered Chinese biotech has emerged with one of the largest public raises in biotech history.

Legend Biotech, the Nanjing-based CAR-T developer, has raised $424 million on NASDAQ. The biotech had originally filed for a still-hefty $350 million, based on a range of $18-$20, but managed to fetch $23 per share, allowing them to well-eclipse the massive raises from companies like Allogene, Juno, Galapagos, though they’ll still fall a few dollars short of Moderna’s record-setting $600 million raise from 2018.

Endpoints News

Keep reading Endpoints with a free subscription

Unlock this story instantly and join 83,100+ biopharma pros reading Endpoints daily — and it's free.

As it hap­pened: A bid­ding war for an an­tibi­ot­ic mak­er in a mar­ket that has rav­aged its peers

In a bewildering twist to the long-suffering market for antibiotics — there has actually been a bidding war for an antibiotic company: Tetraphase.

It all started back in March, when the maker of Xerava (an FDA approved therapy for complicated intra-abdominal infections) said it had received an offer from AcelRx for an all-stock deal valued at $14.4 million.

The offer was well-timed. Xerava was approved in 2018, four years after Tetraphase posted its first batch of pivotal trial data, and sales were nowhere near where they needed to be in order for the company to keep its head above water.

RA Cap­i­tal, Hill­house join $310M rush to back Ever­est's climb to com­mer­cial heights in Chi­na

Money has never been an issue for Everest Medicines. With an essentially open tab from their founders at C-Bridge Capital, the biotech has gone two and a half years racking up drug after drug, bringing in top exec after top exec, and issuing clinical update after update.

But now other investors want in — and they’re betting big.

Everest is closing its Series C at $310 million. The first $50 million comes from the Jiashan National Economic and Technological Development Zone; the remaining C-2 tranche was led by Janchor Partners, with RA Capital Management and Hillhouse Capital as co-leaders. Decheng Capital, GT Fund, Janus Henderson Investors, Rock Springs Capital, Octagon Investments all joined.

Por­tion of Neil Wood­ford’s re­main­ing in­vest­ments, in­clud­ing Nanopore, sold off for $284 mil­lion

It’s been precisely one year and one day since Neil Woodford froze his once-vaunted fund, and while a global pandemic has recently shielded him from the torrent of headlines, the fallout continues.

Today, the California-based patent licensing firm Acacia Research acquired the fund’s shares for 19 healthcare and biotech companies for $284 million.  Those companies include shares for public and private companies and count some of Woodford’s most prominent bio-bets, such as Theravance Biopharma, Oxford Nanopore and Mereo Biopharma, according to Sky News, which first reported the sale. It won’t include shares for BenevelontAI, the machine learning biotech once valued at $2 billion.

Drug man­u­fac­tur­ing gi­ant Lon­za taps Roche/phar­ma ‘rein­ven­tion’ vet as its new CEO

Lonza chairman Albert Baehny took his time headhunting a new CEO for the company, making it absolutely clear he wanted a Big Pharma or biotech CEO with a good long track record in the business for the top spot. In the end, he went with the gold standard, turning to Roche’s ranks to recruit Pierre-Alain Ruffieux for the job.

Ruffieux, a member of the pharma leadership team at Roche, spent close to 5 years at the company. But like a small army of manufacturing execs, he gained much of his experience at the other Big Pharma in Basel, remaining at Novartis for 12 years before expanding his horizons.

Covid-19 roundup: Ab­b­Vie jumps in­to Covid-19 an­ti­body hunt; As­traZeneca shoots for 2B dos­es of Ox­ford vac­cine — with $750M from CEPI, Gavi

Another Big Pharma is entering the Covid-19 antibody hunt.

AbbVie has announced a collaboration with the Netherlands’ Utrecht University and Erasmus Medical Center and the Chinese-Dutch biotech Harbour Biomed to develop a neutralizing antibody that can treat Covid-19. The antibody, called 47D11, was discovered by AbbVie’s three partners, and AbbVie will support early preclinical work, while preparing for later preclinical and clinical development. Researchers described the antibody in Nature Communications last month.