Deep tech, round 2: DCVC Bio bags $350M fund to chase the tip of the life sci­ence spear

It took one trip from San Fran­cis­co to Van­cou­ver for Kier­sten Stead and her DCVC Bio crew to feel con­fi­dent about throw­ing their weight — and cash — be­hind Ab­Cellera.

Kier­sten Stead

CEO Carl Hansen’s aca­d­e­m­ic back­ground and the po­ten­tial of the plat­form, which com­bined ma­chine vi­sion and ro­bot­ics with mi­croflu­idics, were promis­ing. But the site vis­it sealed the Se­ries A deal, where DCVC was the lead and on­ly in­vestor.

“We saw a com­pa­ny that had a high­ly ad­van­taged method for ba­si­cal­ly turn­ing an­ti­body de­vel­op­ment in­to a deep search mech­a­nism, sim­i­lar to what Google might do,” she said.

As Ab­Cellera bur­nish­es its pro­file through an Eli Lil­ly-part­nered an­ti­body de­signed to help end the pan­dem­ic, Stead and John Hamer, the oth­er man­ag­ing part­ner of DCVC Bio, have closed $350 mil­lion to bet on com­pa­nies that sim­i­lar­ly sit at the in­ter­sec­tion of “deep tech” and life sci­ences.

DCVC Bio II, just like its pre­de­ces­sor, will look for ear­ly-stage com­pa­nies. Se­ries A, seed rounds should com­prise the ma­jor­i­ty of the port­fo­lio, but they al­so don’t mind rolling up their sleeves to help spin out a start­up if the op­por­tu­ni­ty aris­es.

John Hamer

The way Stead de­scribes it, these are places where com­pu­ta­tion is an “ab­solute core com­pe­ten­cy” rather than an af­ter­thought or sim­ply a sup­port­ing func­tion.

“Gen­er­al­ly speak­ing, our com­pa­nies gen­er­ate their own da­ta, they have their own de­vel­op­ers and they’re build­ing nov­el AI, nov­el al­go­rithms on their pro­pri­etary da­ta to ad­dress re­cal­ci­trant prob­lems across the life sci­ences,” she said.

The team — most of whom worked to­geth­er at Mon­san­to Growth Ven­tures be­fore mov­ing un­der DCVC — is think­ing big. Cit­ing “the triple threat of cli­mate change, an in­creas­ing glob­al pop­u­la­tion and frag­ile glob­al sup­ply chains,” they al­so want to tap in­to agri­cul­ture and in­dus­tri­al biotech­nol­o­gy.

When it comes to ther­a­peu­tics, Stead is be­gin­ning to see the con­flu­ence of dif­fer­ent modal­i­ties from pro­tein degra­da­tion to cell ther­a­pies and gene edit­ing.

Chas­ing those emerg­ing arcs of com­pu­ta­tion and bi­ol­o­gy has brought DCVC Bio to new in­ven­tions in ro­bot­ics and au­toma­tion — think Or­ca Bio’s au­to­mat­ed sys­tem for man­u­fac­tur­ing cell grafts — as well as liv­ing med­i­cines, such as the ge­net­i­cal­ly en­gi­neered mi­crobes at Novome. Phys­i­cal in­tel­li­gent sys­tems will loom large to com­ple­ment soft­ware break­throughs, she pre­dict­ed, while things like re­in­force­ment learn­ing (al­go­rithms that can gen­er­ate their own da­ta) could work around some of the cur­rent con­straints in bi­o­log­i­cal re­search.

Even though phar­ma these days is clear­ly cog­nizant of the need to in­te­grate new com­pu­ta­tion­al tech­nolo­gies, Stead said they face the re­al chal­lenge of re­cruit­ing peo­ple who have ex­pe­ri­ence set­ting up com­mer­cial AI. That’s not to say they don’t play a key role in bring­ing the com­pounds gen­er­at­ed on new plat­forms to­ward the mar­ket; they may just come in lat­er in the process.

“A com­mon thread of en­tre­pre­neurs that we in­vest in and build com­pa­nies with is that they ran X com­pu­ta­tion­al group at X phar­ma­ceu­ti­cal com­pa­ny but re­al­ized that they couldn’t start from scratch and build it from the ground up,” she said, “and and they were re­al­ly pro­found­ly lim­it­ed by that, and want­ed to start a start­up so that they could do X right, what­ev­er their par­tic­u­lar area of in­ter­est is.”

DCVC man­ag­ing part­ners Matt Ocko and Zachary Bogue said on their blog re­cent­ly the fact that the new fund was raised en­tire­ly dur­ing the pan­dem­ic high­lights the ap­petite for even more. Their first fund has backed some ef­forts to ad­dress the cur­rent health­care cri­sis; it’s time to find “the next set of so­lu­tions to the next set of prob­lems.”

Tar­get­ing a Po­ten­tial Vul­ner­a­bil­i­ty of Cer­tain Can­cers with DNA Dam­age Re­sponse

Every individual’s DNA is unique, and because of this, every patient responds differently to disease and treatment. It is astonishing how four tiny building blocks of our DNA – A, T, C, G – dictate our health, disease, and how we age.

The tricky thing about DNA is that it is constantly exposed to damage by sources such as ultraviolet light, certain chemicals, toxins, and even natural biochemical processes inside our cells.¹ If ignored, DNA damage will accumulate in replicating cells, giving rise to mutations that can lead to premature aging, cancer, and other diseases.

Fol­low biotechs go­ing pub­lic with the End­points News IPO Track­er

The Endpoints News team is continuing to track IPO filings for 2021, and we’ve designed a new tracker page for the effort.

Check it out here: Biopharma IPOs 2021 from Endpoints News

You’ll be able to find all the biotechs that have filed and priced so far this year, sortable by quarter and listed by newest first. As of the time of publishing on Feb. 25, there have already been 16 biotechs debuting on Nasdaq so far this year, with an additional four having filed their S-1 paperwork.

Steve Cutler, Icon CEO (Icon)

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Contract research M&A had a healthy run in recent years before recently petering out. But with the market ripe for a big buyout and the Covid-19 pandemic emphasizing the importance of decentralized trials, Wednesday saw a tectonic shift in the CRO world.

Icon, the Dublin-based CRO, will acquire PRA Health Sciences for $12 billion in a move that will shake up the highest rungs of a fragmented market. The merger would combine the 5th- and 6th-largest CROs by 2020 revenue, according to Icon, and the merger will set the newco up to be the second-largest global CRO behind only IQVIA.

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Tom Barnes (Orna)

The mR­NA era is here. MPM be­lieves the fu­ture be­longs to oR­NA — and Big Phar­ma wants a seat at the ta­ble

If the ultra-fast clinical development of Covid-19 vaccines opened the world’s eyes to the promises of messenger RNA, the subsequent delays in supply offered a crash course on the ultra-complex process of producing them. Even before the formulation and fill-finish steps, mRNA is the precious end product from an arduous journey involving enzyme-aided transcription, modification and purification.

For Bristol Myers Squibb, Novartis Institutes for Biomedical Research, Gilead’s Kite and Astellas, it’s time to rethink the way therapeutic RNA is engineered.

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Michael Rome (Foresite)

In search of 'house­hold health­care brands of the fu­ture,' Fore­site Cap­i­tal rais­es $969M to sa­ti­ate a tech-heavy ap­petite

Back in April 2018, just before Foresite Capital unveiled its $668 million Fund IV and a strategy to focus on tech-driven life science bets, one of its portfolio companies quietly made an announcement.

Fount Therapeutics, a drug discovery outfit backed by Foresite and Eshelman Ventures, had raised $22 million in Series A cash to hatch several fledgling spinouts. “The first ‘NewCo,’ Kinnate, will be focused on developing precision oncology treatments,” read a press release.

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S&P Global has taken a look at the dominant forces shaping the pharma market and come to the conclusion that there will be more downgrades than upgrades in 2021 — the 8th straight year of steady decline.

But it’s not all bad news. Some things are looking up, and there’s still plenty of money to be made in an industry that enjoys a 30% to 40% profit margin, once you factor in steep R&D expenses.

Tal Zaks, Moderna CMO (AP Photo/Rodrique Ngowi, via still image from video)

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How do you exit a company after six years in style? Developing one of the most lucrative and life-saving products in pharma history is probably not the worst way to go.

Tal Zaks, Moderna’s CMO since 2015, will leave the mRNA biotech in September, the biotech disclosed in their annual report this morning. The company has already retained the recruitment firm Russell Reynolds to find a replacement.

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Masayoshi Son, SoftBank CEO (glen photo/Shutterstock)

Japan's Soft­Bank plots bil­lions in biotech in­vest­ments in move that could keep the val­u­a­tion flood ris­ing — re­port

The valuation crazy train in biotech continues to roll into the new year with more than a dozen companies taking a chance on Nasdaq and money flowing in from all sides. Now, a Japanese institutional investor is reportedly weighing an entry into the market in a big way — will it keep the bitcoin-esque flood rising?

Already a part-time investor in biotech, SoftBank could drop billions of dollars into the industry as part of helmsman Masayoshi Son’s plan to spend around $80 billion of the firm’s own assets, according to a report from Bloomberg citing people familiar with the plan.

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Ken Frazier, Merck CEO (Bess Adler/Bloomberg via Getty Images)

UP­DAT­ED: Mer­ck takes a swing at the IL-2 puz­zle­box with a $1.85B play for buzzy Pan­dion and its au­toim­mune hope­fuls

When Roger Perlmutter bid farewell to Merck late last year, the drugmaker perhaps best known now for sales giant Keytruda signaled its intent to take a swing at early-stage novelty with the appointment of discovery head Dean Li. Now, Merck is signing a decent-sized check to bring an IL-2 moonshot into the fold.

Merck will shell out roughly $1.85 billion for Pandion Pharmaceuticals, a biotech hoping to gin up regulatory T cells (Tregs) to treat a range of autoimmune disorders, the drugmaker said Thursday.

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