Sam Chawla (Perceptive)

Per­cep­tive's third cred­it fund has $1.1B in 'in­cre­men­tal cap­i­tal' for grow­ing biotech and health­care com­pa­nies

Two years af­ter wrap­ping its sec­ond Cred­it Op­por­tu­ni­ties Fund with $675 mil­lion, long­time VC Per­cep­tive Ad­vi­sors hit the hard cap on its third — rais­ing $1.1 bil­lion to pump in­to biotech and health­care.

The firm ini­tial­ly set out to raise $750 mil­lion, ac­cord­ing to Sam Chawla, port­fo­lio man­ag­er of Per­cep­tive’s Cred­it Op­por­tu­ni­ty Funds (PCOF). With the larg­er raise, Chawla ex­pects Per­cep­tive to make 20 in­vest­ments, in­clud­ing 9 that have al­ready been giv­en out to com­pa­nies like C4 Ther­a­peu­tics and Pear Ther­a­peu­tics.

“We had like a two-month slow­er pe­ri­od” amid the pan­dem­ic, Chawla said. “But then it picked up pret­ty fast for us … A lot of the com­pa­nies in the sec­tor are re­silient … I think a lot of folks who were fol­low­ing us saw that.”

The firm closed its first PCOF in 2016 with $323 mil­lion, and its sec­ond in 2018 with $675 mil­lion. It made 17 in­vest­ments un­der the sec­ond fund, and plans on spread­ing the third to a mix of com­mer­cial and de­vel­op­ing stage biotechs, as well as com­pa­nies spe­cial­iz­ing in med­ical de­vices, clin­i­cal di­ag­nos­tics and health­care IT. Up­on clos­ing PCOF III, Per­cep­tive now man­ages about $2.1 bil­lion ded­i­cat­ed to pri­vate cred­it.

Per­cep­tive was found­ed in 1999. It has made 91 di­rect in­vest­ments over the last year, and touts re­cent pri­vate in­vest­ments in Sol­id Bio­sciences and Ac­er­ta Phar­ma. Ac­cord­ing to the com­pa­ny’s web­site, the bulk of its in­vest­ments are in pub­licly-trad­ed com­pa­nies small and large. The PCOFs are de­signed to pro­vide debt as less di­lu­tive growth cap­i­tal or in place of a crossover fi­nanc­ing.

“What are we look­ing for?” Chawla said. “We look for dif­fer­en­ti­a­tion in clin­i­cal da­ta as well as com­pa­nies that are bring­ing so­lu­tions to mar­ket that may be bet­ter or faster or cheap­er to de­liv­er bet­ter care.”

Chawla said Per­cep­tive’s most no­table in­vest­ment in the last year was in ArcherDx, a Boul­der, CO-based biotech work­ing on mol­e­c­u­lar de­tec­tion prod­ucts for on­col­o­gy. Last May, Per­cep­tive led a $60 mil­lion round for the com­pa­ny, which was lat­er ac­quired by In­vi­tae in a $1.4 bil­lion deal.

“It was a very suc­cess­ful in­vest­ment for us,” Chawla said. “Our strat­e­gy cen­ters on pro­vid­ing in­cre­men­tal cap­i­tal that is less cost­ly than eq­ui­ty cap­i­tal dur­ing a com­pa­ny’s life­cy­cle” to help it grow, he added lat­er.

Ex­per­i­ment­ing with new mod­els, Per­cep­tive birthed its first in-house start­up in Au­gust: the Chi­nese biotech Lian­Bio, which has three clin­i­cal on­col­o­gy and car­diore­nal can­di­dates in the pipeline. For $26.5 mil­lion in near-term pay­ments and $505 mil­lion in po­ten­tial mile­stones, Bridge­Bio of­fered up two tar­get­ed on­col­o­gy drug can­di­dates and gave Lian pref­er­en­tial fu­ture ac­cess to more than 20 of its pro­grams.

“We look at our­selves as fund­ing the growth seg­ments of health­care and life sci­ences. These are small and … mid-cap com­pa­nies that are grow­ing, bring­ing nov­el tech­nolo­gies to mar­ket, in­no­vat­ing and kind of heavy con­sumers of cap­i­tal,” Chawla said. Once those com­pa­nies scale-up, he added, “they quick­ly turn prof­itable in this in­dus­try.”

M&A: a crit­i­cal dri­ver for sus­tain­able top-line growth in health­care

2021 saw a record $600B in healthcare M&A activity. In 2022, there is an anticipated slowdown in activity, however, M&A prospects remain strong in the medium to long-term. What are future growth drivers for the healthcare sector? Where might we see innovations that drive M&A? RBC’s Andrew Callaway, Global Head, Healthcare Investment Banking discusses with Vito Sperduto, Global Co-Head, M&A.

15 LGBTQ lead­ers in bio­phar­ma; Paul Stof­fels’ Gala­pa­gos re­vamp; As­traZeneca catch­es up in AT­TR; 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.

A return to in-person conferences also marks a return to on-the-ground reporting. My colleagues Beth Synder Bulik and Nicole DeFeudis were on-site at Cannes Lions, bringing live coverage of pharma’s presence at the ad festival — accompanied by photos from Clara Bui, our virtual producer, that bring you right to the scene. You can find a recap (and links to all the stories) below.

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David Loew (Ipsen)

Ipsen snags an ap­proved can­cer drug in $247M M&A deal as an­oth­er bat­tered biotech sells cheap

You can add Paris-based Ipsen to the list of discount buyers patrolling the penny stock pack for a cheap M&A deal.

The French biotech, which has had plenty of its own problems to grapple with, has swooped in to buy Epizyme $EPZM for $247 million in cash and a CVR with milestones attached to it. Epizyme shareholders, who had to suffer through a painfully soft launch of their EZH2a inhibitor cancer drug Tazverik, will get $1.45 per share along with a $1 CVR tied to achieving $250 million in sales from the drug over four consecutive quarters as well as an OK for second-line follicular lymphoma by 1 Jan. 2028.

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AstraZeneca's new Evusheld direct to consumer campaign aims to reach more immunocompromised patients.

As­traZeneca de­buts first con­sumer cam­paign for its Covid-19 pro­phy­lac­tic Evusheld — and a first for EUA drugs

AstraZeneca’s first consumer ad for Evusheld is also a first for drugs that have been granted emergency use authorizations during the pandemic.

The first DTC ad for a medicine under emergency approval, the Evusheld campaign launching this week aims to raise awareness among immunocompromised patients — and spur more use.

Evusheld nabbed emergency authorization in December, however, despite millions of immunocompromised people looking for a solution and now more widespread availability of the drug.

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Yong Dai, Frontera Therapeutics CEO

Scoop: Lit­tle-known Or­biMed-backed biotech clos­es $160M round to start gene ther­a­py tri­al

Frontera Therapeutics, a China and US biotech, has closed a $160 million Series B and received regulatory clearance to test its first gene therapy stateside, Endpoints News has learned.

Led by the largest shareholder, OrbiMed, the biotech has secured $195 million total since its September 2019 founding, according to an email reviewed by Endpoints. The lead AAV gene therapy program is for an undisclosed rare eye disease, according to the source.

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Spanish Prime Minister Pédro Sanchez and European Commission President Ursula von der Leyen (AP Photo/Geert Vanden Wijngaert)

EU to launch vac­cine de­vel­op­ment and man­u­fac­tur­ing part­ner­ship with Latin Amer­i­can and Caribbean coun­tries

While European companies, including BioNTech, are focused on increasing vaccine access to African countries by setting up vaccine manufacturing facilities, the European Union is looking westward to Latin America and the Caribbean.

Speaking at a press conference with Spanish Prime Minister Pédro Sanchez, EU Commission president Ursula von der Leyen said that the EU is launching a new initiative for vaccines and medicines manufacturing in Latin America, to get drugs to Latin America and the Caribbean faster.

DEM BioPharma CEO David Donabedian (L) and executive chair Jan Skvarka

Long­wood sets an­oth­er 'don't eat me' biotech in­to gear with help of for­mer Tril­li­um CEO Jan Skvar­ka

Jonathan Weissman and team are out with a cancer-fighting biotech riding the appetite for those so-called “don’t eat me” and “eat me” signals.

The scientific co-founder — alongside fellow Whitehead Institute colleague Kipp Weiskopf and Stanford biologist Michael Bassik — has launched DEM BioPharma with incubator Longwood Fund and a crop of other investors.

In all, the nascent, 10-employee biotech has $70 million to bankroll hematology- and solid tumor-based programs, including a lead asset that could enter human trials in two to three years, CEO David Donabedian told Endpoints News.

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GSK says its drug for chron­ic hep B could ‘lead to a func­tion­al cure’ — but will it be alone or in com­bi­na­tion?

GSK, newly branded and soon-to-be demerged, shared interim results from its Phase II trial on its chronic hepatitis B treatment, one that it says has the “potential to lead to a functional cure.”

At a presentation at the EASL International Liver Congress, GSK shared that in around 450 patients who received its hep B drug bepirovirsen for 24 weeks, just under 30% had hepatitis B surface antigen and viral DNA levels that were too low to detect.

De­spite a slow start to the year for deals, PwC pre­dicts a flur­ry of ac­tiv­i­ty com­ing up

Despite whispers of a busy year for M&A, deal activity in the pharma space is actually down 30% on a semi-annualized basis, according to PwC’s latest report on deal activity. But don’t rule out larger deals in the second half of the year, the consultants said.

PwC pharmaceutical and life sciences consulting solutions leader Glenn Hunzinger expects to see Big Pharma companies picking up earlier stage companies to try and fill pipeline gaps ahead of a slew of big patent cliffs. Though a bear market continues to maul the biotech sector, Hunzinger said recent deals indicate that pharma companies are still paying above current trading prices.