Fra­zier boosts next pure-play biotech fund to $419M, read­ies new bets for a prac­ticed strat­e­gy

Jamie Top­per Fra­zier Health­care Part­ners


The mon­ey in biotech keeps get­ting big­ger.

Af­ter Fra­zier Health­care Part­ners closed its first ded­i­cat­ed biotech fund with $262 mil­lion al­most ex­act­ly two years ago, man­ag­ing gen­er­al part­ner Jamie Top­per and his crew of VC spe­cial­ists went af­ter some 16 to 18 new biotech in­vest­ments, hew­ing to the start­up rounds that are their sweet spot — and which ac­counts for the bulk of the cash.

Now, they’re get­ting start­ed on their next pure-play fund with $419 mil­lion, giv­ing them sub­stan­tial­ly more mon­ey to bet on about the same num­ber of biotechs as be­fore.

“It’s our po­si­tion that the small­er funds tend to do bet­ter and I think his­tor­i­cal­ly that is true,” Top­per tells me. He thinks $400 mil­lion or so will do nice­ly at stay­ing man­age­able. But they al­so want to stack up well against the com­pe­ti­tion, and these days that calls for tak­ing a big­ger share of the eq­ui­ty in the port­fo­lio com­pa­nies they’re back­ing.

In Top­per’s view there are three key trends that dri­ve their in­vest­ment strat­e­gy.

  1. Reg­u­la­to­ry is­sues are big, and while biotech re­mains one of the most heav­i­ly reg­u­lat­ed in­dus­tries in the world, the en­vi­ron­ment now — es­pe­cial­ly for on­col­o­gy and an­tibi­otics — is “in one of the most fa­vor­able spots it’s ever been in.”
  2. Phar­ma has just as big an ap­petite as ever for tru­ly nov­el meds, so the fo­cus re­mains on those com­pa­nies look­ing to break new ground and get in­to the hands of the com­mer­cial groups that need them the most.
  3. Drug pric­ing pres­sures con­tin­ue to grow, which is just an­oth­er rea­son to stick with the game chang­ers out there, where pay­ers are go­ing to be less like­ly to ex­pe­ri­ence stick­er shock.

It’s no sur­prise, then, to find Fra­zier part­ners lean­ing to­ward new drugs for can­cer and rare dis­eases, which fig­ure promi­nent­ly at the front of the food chain in biotech. They’re ac­tive in GI dis­eases and the liv­er, look­ing to score on the bets be­ing made on new NASH drugs. And when they can find the right ex­pe­ri­enced play­ers in CNS — as they did with the crew at Nau­rex spin-out Aptinyx — they’ll tread in that high-risk are­na as well.

Dan Estes

For Fra­zier, a good re­la­tion­ship can be the key to a hap­py in­vest­ment. And they’re able to reach out from of­fices in the Bay Area, Boston and San Diego to make that hap­pen with some of the most ex­pe­ri­enced play­ers in drug de­vel­op­ment.

“Half of what we do as a health­care VC is tal­ent re­cruit­ment,” he says. “Tal­ent is key.”

It’s al­so key in the VC. Dan Estes has been pro­mot­ed to full part­ner at Fra­zier to shoul­der a big­ger part of the load this time, and Top­per says he’ll make a cou­ple of new hires to broad­en the ded­i­cat­ed biotech group a lit­tle more.

Af­ter rais­ing more than $3 bil­lion in ven­ture mon­ey over the years, Fra­zier’s VCs have the lux­u­ry of work­ing with many of the re­peat en­tre­pre­neurs in the pack who have al­ready made mon­ey for the group. And they’re not too con­cerned about lo­ca­tion — they’ve gone to the Mid­west and Eu­rope when the com­pa­ny is right.

If it all lines up, Fra­zier will come to you.

Brent Saunders [Getty Photos]

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Brent Saunders has found his way out of the current fix he’s in at Allergan $AGN. He’s selling the company to AbbVie for $63 billion in the latest example of the hot M&A market in biopharma.

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Af­ter rais­ing $158M, this up­start's founders have star back­ers and plans to break new ground in gene ther­a­py

Back in 2014, Stephanie Tagliatela opted to take an early exit out of her PhD program after working in Mark Bear’s lab at MIT, where she specialized in the synaptic connections between neuronal cells in the brain. She never finished that PhD, but she and fellow MIT student Kartik Ramamoorthi — who was on the founding team at Voyager — came away with some ideas for a gene therapy startup.

Today, fully 5 years later, she and Ramamoorthi are taking the wraps off of a $104 million mega-round designed to take the cumulative work of their preclinical formative stage for Encoded Therapeutics into human studies. They’ve now raised $158 million since starting out in Illumina’s incubator in the Bay Area, and they believe they are firmly on track to do something unique in gene therapy.

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Novotech CEO Dr. John Moller

Novotech CRO Award­ed Frost & Sul­li­van Best Biotech CRO Asia-Pa­cif­ic 2019

Known in the in­dus­try as the Asia-Pa­cif­ic CRO, Novotech is now lead CRO ser­vices provider for the grow­ing num­ber of in­ter­na­tion­al biotechs se­lect­ing the re­gion for their stud­ies.

Re­flect­ing this Asia-Pa­cif­ic growth, Novotech staff num­bers are up 20% since De­cem­ber 2018 to 600 in-house clin­i­cal re­search peo­ple across a full range of ser­vices, across the re­gion.

Novotech’s ca­pa­bil­i­ties have been rec­og­nized by an­a­lysts like Frost & Sul­li­van, most re­cent­ly with the pres­ti­gious Asia-Pa­cif­ic CRO Biotech of the year award for best prac­tices in clin­i­cal re­search for biotechs for the fifth year. See oth­er awards here.

Sanofi/Re­gen­eron mus­cle ahead of a ri­val No­var­tis/Roche team, win first ap­proval in key rhi­nos­i­nusi­tis field

Re­gen­eron and their part­ners at Sanofi have beat the No­var­tis/Roche team to the punch on an­oth­er key in­di­ca­tion for their block­buster an­ti-in­flam­ma­to­ry drug Dupix­ent. The drug team scored an ac­cel­er­at­ed FDA ap­proval for chron­ic rhi­nos­i­nusi­tis with nasal polyps, mak­ing this the first such NDA for the field.

An­a­lysts have been watch­ing this race for awhile now, as Sanofi/Re­gen­eron won a snap pri­or­i­ty re­view for what is now their third dis­ease in­di­ca­tion for this treat­ment. And they’re not near­ly done, build­ing up hopes for a ma­jor fran­chise.

Image: Chris Varma. Frontier

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Two years af­ter MPM Cap­i­tal en­list­ed Chris Var­ma on its busy on­col­o­gy team, the for­mer en­tre­pre­neur-in-res­i­dence is un­veil­ing his first ven­ture project out of his new stomp­ing grounds in the Bay Area: Fron­tier Med­i­cines.

For Var­ma, who’s al­so co-found­ed Blue­print Med­i­cines and built com­pa­nies at Third Rock and Flag­ship, this marks an­oth­er op­por­tu­ni­ty to ap­ply some cut­ting-edge sci­ence to “sev­er­al of the most im­por­tant and dif­fi­cult tar­gets in can­cer” — tar­gets that oth­ers have tried to tack­le with more clas­si­cal meth­ods and failed. The launch round comes in at $67 mil­lion, which should go some way in scaf­fold­ing a pre­clin­i­cal pipeline and push one or more as­sets in­to the clin­ic three years from now, he tells me.

Richard Gonzalez testifying in front of Senate Finance Committee, February 2019 [AP Images]

Ab­b­Vie's $63B buy­out spot­lights the re­turn of ma­jor M&A deals — de­spite the back­lash

Big time M&A is back. But for how long?

Over the past 18 months we’ve now seen three major buyouts announced: Takeda/Shire; Bristol-Myers/Celgene and now AbbVie/Allergan. And with this latest deal it’s increasingly clear that the sharp fall from grace suffered by high-profile players which have seen their share prices blasted has created an opening for the growth players in big pharma to up their game — in sharp contrast to the popular bolt-on deals that have been driving the growth strategy at Novartis, Merck, Roche and others.

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Two biotech uni­corns swell pro­posed IPOs, eye­ing a $600M-plus wind­fall

We’ve been wait­ing for the ar­rival of Bridge­Bio’s IPO to top off the wave of new biotech of­fer­ings sweep­ing through Nas­daq at the end of H1. And now we learn that it’s been sub­stan­tial­ly up­sized.

Ini­tial­ly pen­ciled in at a uni­corn-sized $225 mil­lion, the KKR-backed biotech has spiked that to the neigh­bor­hood of $300 mil­lion, look­ing to sell 20 mil­lion shares at $14 to $16 each. That’s an added 5 mil­lion shares, re­ports Re­nais­sance Cap­i­tal, which fig­ures the pro­posed mar­ket val­u­a­tion for Neil Ku­mar’s com­pa­ny at $1.8 bil­lion.

No­var­tis holds back the copy­cat brigade's at­tack on its top drug fran­chise — for now

A fed­er­al judge has put a gener­ic chal­lenge to No­var­tis’ block­buster mul­ti­ple scle­ro­sis drug Gilenya on hold while a patent fight plays out in court.

Judge Leonard P. Stark is­sued a tem­po­rary in­junc­tion ear­li­er this week, forc­ing My­lan, Dr. Red­dy’s Lab­o­ra­to­ries and Au­robindo Phar­ma to shelve their launch plans to al­low the patent fight to pro­ceed. He ruled that al­low­ing the gener­ics in­to the mar­ket now would per­ma­nent­ly slash the price for No­var­tis, even if it pre­vails. 

Top an­a­lyst finds a sil­ver lin­ing in Ab­b­Vie’s $63B Al­ler­gan buy­out — but there’s a catch

Af­ter get­ting beat up on all sides from mar­ket ob­servers who don’t much care for the lat­est mega-deal to ar­rive in bio­phar­ma, at least one promi­nent an­a­lyst now is start­ing to like what he sees in the num­bers for Ab­b­Vie/Al­ler­gan.

But it’s go­ing to take some en­cour­age­ment if Ab­b­Vie ex­ecs want it to last.

Ab­b­Vie’s mar­ket cap de­clined $20 bil­lion on Tues­day as the stock took a 17% hit dur­ing the day. And SVB Leerink’s Ge­of­frey Porges can see a dis­tinct out­line of an up­side af­ter re­view­ing the fun­da­men­tals of the deal.

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