Near­ly a year ago, as the pan­dem­ic en­croached and the stock mar­ket cratered, Flag­ship and ARCH Ven­ture an­nounced three mega-funds worth a com­bined $2.6 bil­lion. They want­ed, ARCH’s Bob Nelsen said, to re­store con­fi­dence “that there was mon­ey out there and a lot of it” to in­vest in biotech.

Since then, the stock mar­ket has re­turned — al­most fright­en­ing­ly so — and Nelsen has kept rais­ing and spend­ing cash. On Thurs­day, he an­nounced a new fund, worth $1.85 bil­lion. It’s the largest pot yet for a VC fa­mous for its deep pock­ets.

This time, he said, there’s no mes­sage oth­er than what they’ve been say­ing for years.

“It’s just a con­tin­ued con­fi­dence in ba­sic sci­ence, and in­no­va­tion that’s hap­pen­ing in health­care; it’s re­al­ly a rev­o­lu­tion­ary time,” he told End­points News. It’s “keep­ing your head down and con­tin­u­ing to do what you do.”

His­tor­i­cal­ly, ARCH has been known for back­ing huge plays with record in­vest­ments, most re­cent­ly launch­ing Re­silience with $800 mil­lion and a plan to re­think how all bi­o­log­ic drugs are made. An­oth­er ma­jor bet, the in­fec­tious dis­ease start­up Vir, may yet play a ma­jor role in the pan­dem­ic, lead­ing one of the ma­jor ef­forts to de­vel­op a neu­tral­iz­ing an­ti­body for Covid-19.

In an­nounc­ing the new fund, Nelsen ticked off a range of ar­eas the firm will look to pur­sue, most of which ARCH has pre­vi­ous­ly pushed for­ward, in­clud­ing gene edit­ing and cell ther­a­py.

“Men­tal health is at the top of my mind,” he said.

ARCH has played a key role in pre­vi­ous men­tal health biotechs, most no­tably back­ing Sage Ther­a­peu­tics and Karuna. Nelsen said they may al­so in­vest in ap­proach­es to the is­sue out­side drug de­vel­op­ment, back­ing ef­forts in con­sumer health and health tech.

Al­though known for its huge plays, ARCH al­so hands out about 20 so-called “poor” deals that can range as low as $50,000 and ei­ther pro­vide seed cash for a par­tic­u­lar idea or help feed in­to a larg­er com­pa­ny. Both Vir and Re­silience, for ex­am­ple, com­bined mul­ti­ple small­er com­pa­nies in­to a large one, which then gar­nered sig­nif­i­cant in­vest­ment.

Not all those in­vest­ments, though, have worked out. Last year, Nelsen stepped away from the board of Uni­ty Biotech­nol­o­gy, an an­ti-ag­ing start­up that at­tract­ed sig­nif­i­cant in­vest­ment but failed a ma­jor tri­al last year. It’s at least the sec­ond ma­jor set­back he’s seen in an an­ti-ag­ing play, af­ter a late 90s, ear­ly 2000s bet on Cyn­thia Keny­on’s Elixir Phar­ma­ceu­ti­cals went un­der.

Still, ARCH in­clud­ed it on a list of po­ten­tial ar­eas for the new fund, and Nelsen said he hasn’t lost faith. They’re con­tin­u­ing to mon­i­tor the field, he said.

Four years ago, when Arena CEO Amit Munshi cut its ties to a troubled weight drug and doubled down on the pipeline, a cannabinoid receptor 2 agonist figured prominently in the biotech’s future. On Tuesday evening, however, Munshi’s high hopes for the drug took a nasty hit after it failed a Phase IIb study for patients with irritable bowel syndrome pain.

Put through a randomized pace with 273 patients, researchers said it flat failed the primary endpoint among the large group with abdominal pain. But they quickly went on to highlight subgroup data, always a tricky and controversial ploy, where they spotlighted a positive p value for patients with moderate to severe pain who received the high dose of the drug — one of 3 provided in the study.

As the superbug crisis heats up around the world, Scynexis says it has new data from two interim analyses that prove its antifungal has the potential to treat a broad range of infections.

“The need for new anti-infectives capable of fighting the most resistant pathogens has never been more urgent as we confront the ongoing COVID-19 global pandemic,” CEO Marco Taglietti said in a statement.

When Takeda spun out a pipeline of experimental psychiatry drugs to Neurocrine in a $2 billion deal amid a post-merger shakeout, R&D chief Andy Plump described the therapies as “very interesting but still difficult.”

On Tuesday, we got some idea of how difficult.

San Diego-based Neurocrine revealed that one of the three spotlight clinical programs they’d acquired failed the primary endpoint in a Phase II trial for schizophrenia, registering a negative outcome on the change from baseline in the positive and negative syndrome scale/negative symptom factor score (PANSS NSFS).

Merck took a big gamble when it opted to jump into the Covid-19 vaccine race late, and made an equally momentous decision to back out in late January. Now, looking to chip in on the effort, Merck reportedly agreed to team up with one of the companies that has already crossed the finish line.

President Joe Biden on Tuesday is expected to announce a partnership between drugmakers Merck and Johnson & Johnson to jointly produce J&J’s recombinant protein Covid-19 vaccine that received the FDA’s emergency use authorization Saturday, the Washington Post reported.