Canaan reels in a jum­bo $800M fund with a big fo­cus on a new wave of biotech star­tups

In the lat­est sign of the leviathan ap­petite ven­ture in­vestors have for new tech­nol­o­gy, Canaan Part­ners — one of the busiest play­ers in biotech — has raised a firm-record $800 mil­lion fund to dri­ve a new wave of bets in the biz.

The Sil­i­con Val­ley-based Canaan has many in­ter­ests — fin­tech, mar­ket­places, en­ter­prise — with a spe­cial place in the port­fo­lio for a big chunk of bio­phar­ma. Known as a reg­u­lar in seed fi­nanc­ings and Se­ries A rounds, Canaan likes to get in ear­ly.

Canaan al­so likes to make mon­ey, which has been helped with 30 ex­its over the past 3 years. Nine of those were from the biotech port­fo­lio. The lim­it­ed part­ners have been good in re­turn; the last fund Canaan raised rang in at $675 mil­lion.

Tim Shan­non

Tim Shan­non, the East Coast gen­er­al part­ner and an ex­pe­ri­enced biotech vet who’s cur­rent­ly work­ing with a slate of com­pa­nies that in­cludes Arv­inas and IDEAYA, is ready to roll.

There are a num­ber of ear­ly-stage in­vestors that Canaan likes to work with, he says. Once their com­pa­nies hit Phase I, says Shan­non, they pre­fer to in­vest in ar­eas where they know they have a good chance of suc­cess. So ge­net­ic val­i­da­tion is im­por­tant for de-risk­ing their work. An­ti-in­fec­tives have been a hall­mark of their work.

But aside from the big­ger num­bers in Fund XI, adds Shan­non, not much changes.

“I think we’ll keep our same phi­los­o­phy in terms of the kinds of in­vest­ments we’re tar­get­ing,” he says. Then he ticks them off: “Ear­ly-stage, trans­for­ma­tive, high own­er­ship, high re­turns.”

You can fig­ure about 40% of the fund will go to health­care, rough­ly $360 mil­lion. Of that, look for about 75% to go in­to bio­phar­ma af­ter “di­al­ing up a notch” in the in­dus­try. That will trans­late in­to about 15 new com­pa­nies — plat­forms are a key — with about $15 mil­lion or so for each. A good rule of thumb is that 60% will be­come suc­cess­ful ex­its. Break it down fur­ther, he says, and 20% will be fund mak­ers, 20% will con­tribute, 20% will get by.

What’s not on Canaan’s plate? Com­mon dis­eases are tough to crack, says Shan­non. Di­a­betes and car­dio are two prime ex­am­ples, where ge­net­ic val­i­da­tion is of­ten lack­ing. PC­SK9 could have been a break­through, he notes, but it hasn’t fired up yet.

That ba­sic phi­los­o­phy, trans­lat­ed by a small team of pro­fes­sion­als, has paid off con­sis­tent­ly for the past 10 years.

In a blog post out to­day, the VC un­der­scored the val­ue of di­ver­si­ty and col­lab­o­ra­tion:

It may sound trite, but hav­ing a “no ass­holes pol­i­cy” works. Ours is a team-ori­ent­ed, trans­par­ent and col­lab­o­ra­tive cul­ture, with a com­pen­sa­tion struc­ture that re­wards per­for­mance — re­gard­less of a team mem­ber’s tenure. Sil­i­con Val­ley, in par­tic­u­lar, has seen the im­pact of un­der­rep­re­sen­ta­tion in gut-wrench­ing ways over the past few weeks. We know that hav­ing more points of view at the ta­ble makes a dif­fer­ence and we lead by ex­am­ple, with an in­vest­ment team that is 40% women — in­clud­ing at the Gen­er­al Part­ner lev­el — and 47% im­mi­grant or first-gen­er­a­tion.

Aerial view of Genentech's campus in South San Francisco [Credit: Getty]

Genen­tech sub­mits a big plan to ex­pand its South San Fran­cis­co foot­print

The sign is still there, a quaint reminder of whitewashed concrete not 5 miles from Genentech’s sprawling, chrome-and-glass campus: South Francisco The Industrial City. 

The city keeps the old sign, first erected in 1923, as a tourist site and a kind of civic memento to the days it packed meat, milled lumber and burned enough steel to earn the moniker “Smokestack of the Peninsula.” But the real indication of where you are and how much has changed both in San Francisco and in the global economy since a couple researchers and investors rented out an empty warehouse 40 years ago comes in a far smaller blue sign, resembling a Rotary Club post, off the highway: South San Francisco, The Birthplace of Biotech.

Here comes the oral GLP-1 drug for di­a­betes — but No­vo Nordisk is­n't dis­clos­ing Ry­bel­sus price just yet

Novo Nordisk’s priority review voucher on oral semaglutide has paid off. The FDA approval for the GLP-1 drug hit late Friday morning, around six months after the NDA filing.

Rybelsus will be the first GLP-1 pill to enter the type 2 diabetes market — a compelling offering that analysts have pegged as a blockbuster drug with sales estimates ranging from $2 billion to $5 billion.

Ozempic, the once-weekly injectable formulation of semaglutide, brought in around $552 million (DKK 3.75 billion) in the first half of 2019.

As Nas­daq en­rolls the fi­nal batch of 2019 IPOs, how have the num­bers com­pared to past years?

IGM Biosciences’ upsized IPO haul, coming after SpringWorks’ sizable public debut, has revved up some momentum for the last rush of biotech IPOs in 2019.

With 39 new listings on the books and roughly two more months to go before winding down, Nasdaq’s head of healthcare listings Jordan Saxe sees the exchange marking 50 to 60 biopharma IPOs for the year.

“December 15 is usually the last possible day that companies will price,” he said, as companies get ready for business talks at the annual JP Morgan Healthcare Conference in January.

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Oxitec biologist releases genetically modified mosquitoes in Piracicaba, Brazil in 2016 [credit: Getty Images]

In­trex­on unit push­es back against claims its GM mos­qui­toes are mak­ing dis­ease-friend­ly mu­tants

When the hysteria of Zika transmission sprang into the American zeitgeist a few years ago, UK-based Oxitec was already field-testing its male Aedes aegypti mosquito, crafted to possess a gene engineered to obliterate its progeny long before maturation.

But when a group of independent scientists evaluated the impact of the release of these genetically-modified mosquitoes in a trial conducted by Oxitec in Brazil between 2013 and 2015, they found that some of the offspring had managed to survive — prompting them to speculate what impact the survivors could have on disease transmission and/or insecticide resistance.

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[via AP Images]

Pur­due threat­ens to walk away from set­tle­ment, asks to pay em­ploy­ees mil­lions in bonus­es

There are two updates on the lawsuit against Purdue Pharma over its role in fueling the opioid epidemic, as the Sackler family threatens to walk away from their pledge to pay out $3 billion if a bankruptcy judge does not stop outstanding state lawsuits against them. At the same time, the company has asked permission to pay millions in bonuses to select employees.

Purdue filed for chapter 11 bankruptcy this week as part of its signed resolution to over 2,000 lawsuits. The deal would see the Sackler family that owns Purdue give $3 billion from their personal wealth and the company turned into a trust committed to curbing and reversing overdoses.

David Grainger [file photo]

'Dis­con­nect the bas­tard­s' — one biotech's plan to break can­cer cell­s' uni­fied de­fens­es

Chemotherapy and radiotherapy are the current gladiators of cancer treatment, but they come with well-known limitations and side-effects. The emergence of immunotherapy — a ferocious new titan in oncologist’s toolbox — takes the brakes off the immune system to kill cancer cells with remarkable success in some cases, but the approach is not always effective. What makes certain forms of cancer so resilient? Scientists may have finally pieced together a tantalizing piece of the puzzle, and a new biotech is banking on a new approach to fill the gap.

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A fa­vorite in Alex­ion’s C-suite is leav­ing, and some mighty sur­prised an­a­lysts aren’t the least bit hap­py about it

Analysts hate to lose a biotech CFO they’ve come to trust and admire — especially if they’re being blindsided by a surprise exit.

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Scott Gottlieb, AP Images

Scott Got­tlieb is once again join­ing a team that en­joyed good times at the FDA un­der his high-en­er­gy stint at the helm

Right after jumping on Michael Milken’s FasterCures board on Monday, the newly departed FDA commissioner is back today with news about another life sciences board post that gives him a ringside chair to cheer on a lead player in the real-world evidence movement — one with very close ties to the FDA.

Aetion is reporting this morning that Gottlieb is joining their board, a group that includes Mohamad Makhzoumi, a general partner at New Enterprise Associates, where Gottlieb returned after stepping out of his role at the FDA 2 years after he started.

Gottlieb — one of the best connected execs in biopharma — knows this company well. As head of FDA he championed the use of real-world evidence to help guide drug developers and the agency in gaining greater efficiencies, which helped set up Aetion as a high-profile player in the game.

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Tower Bridge in London [Shutterstock]

#UK­BIO19: Join GSK’s Hal Bar­ron and a group of top biotech ex­ecs for our 2nd an­nu­al biotech sum­mit in Lon­don

Over the past 10 years I’ve made a point of getting to know the Golden Triangle and the special role the UK biopharma industry plays there in drug development. The concentration of world class research institutes, some of the most accomplished scientists I’ve ever seen at work and a rising tide of global investment cash leaves an impression that there’s much, much more to come as biotech hubs are birthed and nurtured.