US biotechs have seen a dras­tic drop in Chi­nese ven­ture fund­ing for the in­dus­try amid macro lev­el trade ten­sions be­tween the two coun­tries and the Amer­i­can gov­ern­ment’s height­ened scruti­ny of for­eign in­vest­ment. While VCs from Chi­na ac­count­ed for $1.65 bil­lion worth of fund­ing in the first half of last year, that fig­ure has fall­en near­ly 60% to $725 mil­lion in 2019, the Fi­nan­cial Times re­port­ed cit­ing Pitch­Book da­ta.

The once-ob­scure Com­mit­tee on For­eign In­vest­ment in the Unit­ed States (CFIUS) be­came a house­hold name in this world late 2018 when it broad­ened its re­view of for­eign in­vest­ment in biotech for na­tion­al se­cu­ri­ty rea­sons. It has since stirred up fears that fledg­ling US biotechs may have trou­ble ac­cess­ing deep wells of Chi­na mon­ey, though VCs have large­ly played down the wor­ries.

So far, there’s on­ly been one known in­stance of di­rect CFIUS in­ter­fer­ence in­to health­care. The com­mit­tee is said to have de­mand­ed that Pa­tients­LikeMe — an on­line ser­vice con­nect­ing pa­tients with each oth­er and gen­er­at­ing re­al-world da­ta in the process — sell off the ma­jor­i­ty stake held by Shen­zhen-based health da­ta com­pa­ny iCar­bonX. (Pa­tients­LikeMe was ul­ti­mate­ly ac­quired by Unit­ed­Health.) Nev­er­the­less, it is un­clear how many fund­ing rounds might have fiz­zled in the head­wind.

William Hasel­tine

At least one, ac­cord­ing to William Hasel­tine, the re­searcher and en­tre­pre­neur be­hind mul­ti­ple star­tups in­clud­ing Den­dreon, Cam­bridge Bio­sciences and X-VAX.

Hasel­tine told the FT that he had been forced to aban­don a new project af­ter a Chi­nese in­vestor called off a $30 mil­lion seed deal. In his ex­pe­ri­ence, Chi­nese fund­ing has been par­tic­u­lar­ly good at bankrolling very ear­ly-stage com­pa­nies gen­er­ous­ly.

“As soon as the Cfius pro­gramme went in­to place and [US Pres­i­dent Don­ald] Trump start­ed mak­ing a lot of noise about Cfius, [the mon­ey] be­gan to evap­o­rate,” he said to the pa­per.

Fo­s­un In­ter­na­tion­al, the con­glom­er­ate that has its own bio­phar­ma busi­ness in Chi­na, has in­di­cat­ed that it’s turn­ing greater at­ten­tion to emerg­ing mar­kets as trade re­la­tions with the US grow in­creas­ing­ly frayed.

“Trade fric­tion has im­pact­ed our in­vest­ments in the US, but not to the ex­tent of stop­ping all deals,” Kevin Xie, who man­ages its US strat­e­gy, told Bloomberg.

At the same time, it’s worth not­ing that some of the most well known Chi­nese VC firms — such as 6 Di­men­sions and Qim­ing Ven­tures — have ded­i­cat­ed state­side funds in­vest­ing with US dol­lars.

Leon Chen of 6 Di­men­sions pre­vi­ous­ly told me that he’s not over­ly con­cerned about CFIUS re­views as they will abide by the sys­tem — even if it slows down the process.

“This in­dus­try needs more cap­i­tal than the cur­rent in­vest­ment can sup­ply, and the in­dus­try needs much much more risk tak­ing in­vestors than cur­rent­ly we can prac­ti­cal­ly count,” he said.

Frank Yu Al­ly Bridge

Frank Yu, founder and CEO of Al­ly Bridge Group, echoes that sen­ti­ment. Sure, life sci­ences care about how they would man­age CFIUS is­sues as a non-US in­vestor, but their un­der­stand­ing of what they’re in­vest­ing in and the ca­pa­bil­i­ty to add val­ue are more im­por­tant.

“We are per­ceived as a tru­ly glob­al life sci­ence spe­cial­ist in­vestor rather than a Chi­na VC,” he wrote in an email. “We un­der­stand and man­age CFIUS-re­lat­ed is­sues very well, which are very much wel­comed by US com­pa­nies.”

Money has never been an issue for Everest Medicines. With an essentially open tab from their founders at C-Bridge Capital, the biotech has gone two and a half years racking up drug after drug, bringing in top exec after top exec, and issuing clinical update after update.

But now other investors want in — and they’re betting big.

Everest is closing its Series C at $310 million. The first $50 million comes from the Jiashan National Economic and Technological Development Zone; the remaining C-2 tranche was led by Janchor Partners, with RA Capital Management and Hillhouse Capital as co-leaders. Decheng Capital, GT Fund, Janus Henderson Investors, Rock Springs Capital, Octagon Investments all joined.

There haven’t been a lot of big venture rounds for biotech companies looking to run a Phase II study in Alzheimer’s.

The field has been a disaster over the past decade. Amyloid didn’t pan out as a target — going down in a litany of Phase III failures — and is now making its last stand at Biogen. Tau is a comer, but when you look around and all you see is destruction, the idea of backing a startup trying to find complex cocktails to swing the course of this devilishly complicated memory-wasting disease would daunt the pluckiest investors.

In a bewildering twist to the long-suffering market for antibiotics — there has actually been a bidding war for an antibiotic company: Tetraphase.

It all started back in March, when the maker of Xerava (an FDA approved therapy for complicated intra-abdominal infections) said it had received an offer from AcelRx for an all-stock deal valued at $14.4 million.

The offer was well-timed. Xerava was approved in 2018, four years after Tetraphase posted its first batch of pivotal trial data, and sales were nowhere near where they needed to be in order for the company to keep its head above water.

It’s been precisely one year and one day since Neil Woodford froze his once-vaunted fund, and while a global pandemic has recently shielded him from the torrent of headlines, the fallout continues.

Today, the California-based patent licensing firm Acacia Research acquired the fund’s shares for 19 healthcare and biotech companies for $284 million.  Those companies include shares for public and private companies and count some of Woodford’s most prominent bio-bets, such as Theravance Biopharma, Oxford Nanopore and Mereo Biopharma, according to Sky News, which first reported the sale. It won’t include shares for BenevelontAI, the machine learning biotech once valued at $2 billion.

Lonza chairman Albert Baehny took his time headhunting a new CEO for the company, making it absolutely clear he wanted a Big Pharma or biotech CEO with a good long track record in the business for the top spot. In the end, he went with the gold standard, turning to Roche’s ranks to recruit Pierre-Alain Ruffieux for the job.

Ruffieux, a member of the pharma leadership team at Roche, spent close to 5 years at the company. But like a small army of manufacturing execs, he gained much of his experience at the other Big Pharma in Basel, remaining at Novartis for 12 years before expanding his horizons.

Another Big Pharma is entering the Covid-19 antibody hunt.

AbbVie has announced a collaboration with the Netherlands’ Utrecht University and Erasmus Medical Center and the Chinese-Dutch biotech Harbour Biomed to develop a neutralizing antibody that can treat Covid-19. The antibody, called 47D11, was discovered by AbbVie’s three partners, and AbbVie will support early preclinical work, while preparing for later preclinical and clinical development. Researchers described the antibody in Nature Communications last month.