ARCH announces largest fund yet, raising $1.85B to back mental health, cell and gene editing approaches
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.