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.

Jean-Paul Clozel, Idorsia CEO (Patrick Straub/Keystone via AP Images)

Idor­si­a's brain bleed drug flunks PhI­II tri­al, a decade af­ter pre­vi­ous flop

Idorsia’s long journey with clazosentan came to an abrupt “unexpected result” Monday morning with a Phase III flop.

The Swiss biopharma said the drug did not meet the main goal of the late-stage REACT study, conducted in the US, Canada and Europe since early 2019.

The 409-patient trial tested the intravenous drug’s ability to prevent complications due to delayed cerebral ischemia following aneurysmal subarachnoid hemorrhage (aSAH), in which blood vessels in the brain narrow and blood accumulates around the brain’s surface, which then dials up the pressure on the brain.

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Kenji Yasukawa, Astellas CEO (Photographer: Akio Kon/Bloomberg via Getty Images)

Astel­las taps chief strat­e­gy of­fi­cer as next CEO to 'go on the ag­gres­sive'

Five years into its big R&D revamp, Astellas says it’s time for a changing of the guard.

Kenji Yasukawa, who took over as president and CEO in 2018, will step down to become chairman of the board in April, making room for Naoki Okamura to take over. Okamura joined the company in 1986 and has served in a variety of finance, business and strategy roles, including most recently as chief strategy officer.

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Clin­i­cal tri­al di­ver­si­ty da­ta show mis­match be­tween en­roll­ment and dis­ease preva­lence, GSK says

A lack of diversity in clinical trials has persisted despite decades of initiatives to try to turn the tide.

In a recent review of 17 years of clinical trials, drugmaker GSK found that there were some mismatches between the demographics of its US-based trials and how prevalent diseases were in those populations.

The results, the company says, will help GSK and others design studies that better represent epidemiological rates within races and ethnicities.

The Big Phar­ma dis­card pile; Lay­offs all around while some biotechs bid farewell; New Roche CEO as­sem­bles top team; and more

Welcome back to Endpoints Weekly, your review of the week’s top biopharma headlines. Want this in your inbox every Saturday morning? Current Endpoints readers can visit their reader profile to add Endpoints Weekly. New to Endpoints? Sign up here.

With earnings seasons in full swing, we’ve listened in on all the calls so you don’t have to. But news is popping up from all corners, so make sure you check out our other updates, too.

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Raymond Stevens, Structure Therapeutics CEO

Be­hind Fri­day's $161M IPO: A star sci­en­tist, GPCR drug dis­cov­ery and a plan to chal­lenge phar­ma in di­a­betes

What does it take to pull off a $161 million biotech IPO these days?

In Structure Therapeutics’ case, it means having a star scientist co-founder paired with the computational drug discovery company Schrödinger, $198 million in private funding from blue-chip investors, almost six years of research work on G protein-coupled receptors and a slate of oral, small-molecule drugs, with an eye on the huge and growing diabetes and weight-loss market.

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Sen. Ron Wyden (D-OR) (Francis Chung/E&E News/Politico via AP Images)

In­fla­tion re­bates in­com­ing: Wyden calls on CMS to move quick­ly as No­var­tis CEO pledges re­ver­sal

Senate Finance Chair Ron Wyden (D-OR) this week sent a letter to the head of the Centers for Medicare & Medicaid Services seeking an update on how and when new inflation-linked rebates will take effect for drugs that see major price spikes.

The newly signed Inflation Reduction Act requires manufacturers to pay a rebate to Medicare when they increase drug prices faster than the rate of inflation.

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Trodelvy notch­es a win in most com­mon form of breast can­cer

Following a promise last year to go “big and fast in breast cancer,” Gilead has secured a win for Trodelvy in the most common form.

The drug was approved to treat HR-positive, HER2-negative breast cancer patients who’ve already received endocrine-based therapy and at least two other systemic therapies for metastatic cancer, Gilead announced on Friday.

Trodelvy won its first indication in metastatic triple-negative breast cancer back in 2020, and has since added urothelial cancer to the list. HR-positive HER2-negative breast cancer accounts for roughly 70% of new breast cancer cases worldwide per year, according to senior VP of oncology clinical development Bill Grossman, and many patients develop resistance to endocrine-based therapies or worsen on chemotherapy.

Af­ter 13 years, Ramy Mah­moud steps in­to CEO seat at Opti­nose; Ru­pert Vessey set to ex­it Bris­tol My­ers in Ju­ly

After 13 years as president and COO at Optinose, Ramy Mahmoud has stepped into a new role as its CEO. He is taking the place of Peter Miller, who stepped down earlier this week, though Miller is still staying with the company as a consultant.

In 2010, the two business partners joined Optinose to take it in a new direction, transforming it from a delivery platform to product company. They previously worked together at Johnson & Johnson, when Miller was president at Janssen and Mahmoud headed medical affairs. Miller said after he learned about Optinose, “I did what I always do, which is find people smarter than me to talk with about the idea. And the first person I called was Ramy … and I said, ‘Hey, Ramy, what do you think of this technology?’”

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Ma­gen­ta halts stem cell work and may sell it­self fol­low­ing pa­tient death, clin­i­cal hold

Magenta Therapeutics said it is halting work on its stem cell transplant drug pipeline and may sell itself, a week after the company reported the death of a patient in an early stage trial of its antibody-drug conjugate.

The Cambridge, MA-based company said it will conduct a “review of strategic alternatives,” and that could include an “acquisition, merger, business combination, or other transaction.”

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