SVB's crys­tal ball points to big mon­ey biotech IPOs, down­shift in the tor­rid pace of ven­ture in­vest­ing

It was a bang-up year for bio­phar­mas in need of cash. In­vestors closed enor­mous funds in 2017, IPOs rolled out at a steady pace, and ven­ture cap­i­tal dol­lars flowed in­to com­pa­nies in record quan­ti­ties.

Sun­ny days are ahead for both the IPO and M&A mar­kets, ac­cord­ing to a Sil­i­con Val­ley Bank re­port, but ven­ture dol­lars may slow down in 2018.

The bank es­ti­mates in­vest­ments in biotech and phar­ma hit a record in 2017, with 548 com­pa­nies pick­ing up a pro­ject­ed $10.5 bil­lion in col­lec­tive in­vest­ment mon­ey dur­ing the year. Back in 2013, with near­ly the same num­ber of deals, com­pa­nies on­ly brought in $5.2 bil­lion to­tal. This in­di­cates the year saw much big­ger rounds, of course. Just in Q4, SVB count­ed sev­er­al mega-rounds, with Cul­li­nan On­col­o­gy, Ar­cus Bio­sciences, and Al­lakos each rais­ing over $100 mil­lion.

Big rounds are al­so re­flec­tive of the piles of cash held by health­care ven­ture firms. Ac­cord­ing to the re­port, health­care ven­ture fund­ing hit a new high in 2017 with $9.1 bil­lion raised by funds dur­ing the year. That’s up from $7.2 bil­lion last year, and sig­nif­i­cant­ly up from the years be­tween 2009 and 2013, when funds raised hov­ered be­tween $2 bil­lion and $4 bil­lion.

The bank pre­dicts that num­ber will de­cline next year, with health­care ven­ture funds rais­ing be­tween $6 bil­lion to $7 bil­lion. That’s be­cause many larg­er firms closed new funds in 2017, the re­port says. The bank al­so ex­pects bio­phar­ma in­vestors will slow their deal pace next year.

Where is this mon­ey go­ing? Pri­mar­i­ly on­col­o­gy com­pa­nies (no sur­prise there), and com­pa­nies de­vel­op­ing plat­form tech­nol­o­gy. Of the 125 Se­ries A in­vest­ments made in 2017, 38 were can­cer drug mak­ers and 19 com­pa­nies had plat­form tech.

“Plat­form com­pa­nies piqued in­vestor in­ter­est, as their tech­nolo­gies showed promise for mul­ti­ple ex­its across dif­fer­ent in­di­ca­tions,” the re­port states.

IPOs and M&As

A few more VC-backed bio­phar­mas went pub­lic in 2017 than the year pri­or, with 31 IPOs com­pared to 28 in 2016. It’s im­proved, but nowhere near the go-go days of 2014, when 66 bio­phar­mas went pub­lic.

It’s im­por­tant to note, how­ev­er, that these IPOs are rais­ing big mon­ey. In 2017, 39% of IPOs, or 12 com­pa­nies to­tal, raised over $100 mil­lion. That’s sig­nif­i­cant when you look at pri­or years. In 2016, on­ly one com­pa­ny raised over $100 mil­lion.

Sil­i­con Val­ley Bank ex­pects IPOs to re­main steady dur­ing 2018, with 28-32 IPOs pre­dict­ed next year.

Al­though IPOs in­creased dur­ing the year, M&As did not. Af­ter a lack­lus­ter 2016 (thanks to un­cer­tain­ty in an elec­tion year), many ex­perts in the in­dus­try pre­dict­ed — with Pres­i­dent Trump firm­ly seat­ed in the White House — that we would see an uptick in merg­ers and ac­qui­si­tions in 2017. They were wrong. Be­sides Gilead’s near­ly $12 bil­lion move on Kite, 2017 was rather qui­et on the M&A front. That has some won­der­ing if ac­quir­ers are on stand­by, wait­ing to see what will hap­pen with tax re­form be­fore mov­ing for­ward on big pur­chas­es.

The bank is ex­pect­ing M&A to pick up next year, with an es­ti­mat­ed 20-plus “big ex­its” based on avail­able cash held by ac­quir­ers — and the need for Big Phar­ma to re­plen­ish their pipelines.

The re­port — called Health­care In­vest­ments and Ex­its 2018 — was au­thored by SVB’s Jonathan Nor­ris, Thomas Joyce, and Caitlin Tol­man.

Lina Gugucheva, NewAmsterdam Pharma CBO

Phar­ma group bets up to $1B-plus on the PhI­II res­ur­rec­tion of a once dead-and-buried LDL drug

Close to 5 years after then-Amgen R&D chief Sean Harper tamped the last spade of dirt on the last broadly focused CETP cholesterol drug — burying their $300 million upfront and the few remaining hopes for the class with it — the therapy has been fully resurrected. And today, the NewAmsterdam Pharma crew that did the Lazarus treatment on obicetrapib is taking another big step on the comeback trail with a €1 billion-plus regional licensing deal, complete with close to $150 million in upfront cash.

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How pre­pared is bio­phar­ma for the cy­ber dooms­day?

One of the largest cyberattacks in history happened on a Friday, Eric Perakslis distinctly remembers.

Perakslis, who was head of Takeda’s R&D Data Sciences Institute and visiting faculty at Harvard Medical School at the time, had spent that morning completing a review on cybersecurity for the British Medical Journal. Moments after he turned it in, he heard back from the editor: “Have you heard what’s going on right now?”

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Scoop: Roche scraps one of two schiz­o­phre­nia PhII tri­als due to missed pri­ma­ry end­point

Roche has terminated one of two Phase II trials testing its drug ralmitaront in patients with schizophrenia, the Big Pharma confirmed to Endpoints News.

The study was terminated last month, according to a June 22 update to the registry on clinicaltrials.gov. Begun in September 2020, the trial was looking at ralmitaront in patients with acute schizophrenia. The trial enrolled 286 patients out of an originally planned 308.

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Scoop: Boehringer qui­et­ly shut­ters a PhII for one of its top drugs — now un­der re­view

Boehringer Ingelheim has quietly shut down a small Phase II study for one of its lead drugs.

The private pharma player confirmed to Endpoints News that it had shuttered a study testing spesolimab as a therapy for Crohn’s patients suffering from bowel obstructions.

A spokesperson for the company tells Endpoints:

Taking into consideration the current therapeutic landscape and ongoing clinical development programs, Boehringer Ingelheim decided to discontinue our program in Crohn’s disease. It is important to note that this decision is not based on any safety findings in the clinical trials.

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Pearl Huang, Dunad Therapeutics CEO (Ken Richardson, PR Newswire)

Long­time biotech leader Pearl Huang takes the reins as CEO of No­var­tis-backed up­start

It has only been a few months since Pearl Huang exited the top seat at Cygnal Therapeutics, but now she’s back at the helm of another biotech.

After taking a few months off — passing an exam in that time to get her captain’s license from the US Coast Guard — she’s been named CEO of Dunad Therapeutics, a biotech focused on developing a small molecule covalent therapies that was founded in 2020. Huang told Endpoints News that two factors attracted her to going back to the c-suite: the company’s technology and its co-founders.

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Alex­ion puts €65M for­ward to strength­en its po­si­tion on the Emer­ald Isle

Ireland has been on a roll in 2022, with several large pharma companies announcing multimillion-euro projects. Now AstraZeneca’s rare disease outfit Alexion is looking to get in on the action.

Alexion on Friday announced a €65 million ($68.8 million) investment in new and enhanced capabilities across two sites in the country, including at College Park in the Dublin suburb of Blanchardstown and the Monksland Industrial Park in the central Irish town of Athlone, according to the Industrial Development Agency of Ireland.

A Mer­ck part­ner is sucked in­to the fi­nan­cial quag­mire as key lender calls in a note

Another biotech standing on shaky financial legs has fallen victim to the bears.

Merck partner 4D Pharma has reported that a key lender, Oxford Finance, shoved the UK company into administration after calling in a $14 million loan they couldn’t immediately make good on. Trading in their stock was halted with a market cap that had fallen to a mere £30 million.

“Despite the very difficult prevailing market conditions,” 4D reported on Friday, the biotech had been making progress on finding some new financing and turned to Oxford with an alternative late on Thursday and then again Friday morning.

Members of the G7 from left to right: Prime Minister of Italy Mario Draghi, European Commission President Ursula von der Leyen, President Joe Biden, German Chancellor Olaf Scholz, British Prime Minister Boris Johnson, Canadian Prime Minister Justin Trudeau, Prime Minister of Japan Fumio Kishida, French President Emmanuel Macron and European Council President Charles Michel (AP Photo/Susan Walsh)

Biden and G7 na­tions of­fer funds for vac­cine and med­ical prod­uct man­u­fac­tur­ing project in Sene­gal

Amidst recently broader vaccine manufacturing initiatives from the EU and European companies, the G7 summit in the mountains of Bavaria has brought about some positive news for closing vaccine and medical product manufacturing gaps around the globe.

According to a statement from the White House, the G7 leaders have formally launched the partnership for global infrastructure, PGII. The effort will aim to mobilize hundreds of billions of dollars to deliver infrastructure projects in several sectors including the medical and pharmaceutical manufacturing space.

Fed­er­al judge de­nies Bris­tol My­er­s' at­tempt to avoid Cel­gene share­hold­er law­suit

Some Celgene shareholders aren’t happy with how Bristol Myers Squibb’s takeover went down.

On Friday, a New York federal judge ruled that they have a case against the pharma giant, denying a request to dismiss allegations that it purposely slow-rolled Breyanzi’s approval to avoid paying out $6.4 billion in contingent value rights (CVR).

When Bristol Myers put down $74 billion to scoop up Celgene back in 2019, liso-cel — the CAR-T lymphoma treatment now marketed as Breyanzi — was supposedly one of the centerpieces of the deal. After going back and forth on negotiations for about six months, BMS put $6.4 billion into a CVR agreement that required an FDA approval for Zeposia, Breyanzi and Abecma, each by an established date.