The growing number of private biopharma and diagnostic/therapeutic technology company financings completed in recent months masks an overall year-over-year decrease in the total value of those deals.

A look at the just-released 2Q 2019 PitchBook National Venture Capital Association (NVCA) Venture Monitor report detailing January–June 2019 activity showed a total $8.3 billion in 404 deals took place in the “pharma & biotech” sector. That’s a 14% drop in value from the $9.67 billion recorded during the first half of 2018, though the number of deals rose year-over-year from 317 in the first half of last year.

Looking quarter by quarter, private financing activity resembled other categories of market-driven financial activity such as IPOs by declining during Q1 2019, then partially rebounding during Q2—but not enough to surpass Q2 2018. The roller-coaster ride reflects investor response to challenges that include last fall’s global equity sell-off, the U.S. government shutdown, continuing trade and political tensions—and the Foreign Investment Risk Review Modernization Act (FIRRMA) signed into law last year by President Donald Trump.

Under a pilot program taking effect November 10, 2018, review of foreign investments by the Committee on Foreign Investment in the U.S.?was extended to non-U.S. companies seeking non-controlling stakes in U.S. companies that develop “critical technologies” in biotech and 26 other industries. According to PitchBook data cited by the Financial Times, Chinese investors participated in biotech VC financings totaling $725 million in the first half of this year, down from $1.65 billion in January–June 2018.

The PwC/CB Insights quarterly MoneyTree Report recorded a total $3.525 billion in the second quarter, up 22% from $2.880 billion in Q1 of this year, but still down 18% from $4.323 billion in April-June 2018.

Below is GEN’s A-List of top 10 private financings list for the first seven months of 2019. Companies are listed with the amounts they raised, the type of financing, the date(s) announced, the stated purposes of their financings, leading investors, and participating partner investors. In a handful of instances, financing partners disclosed the amount of their investments; those instances are included in parentheses next to the partners’ names.

The combined amount of the top 10 “Young Company” biotech financings within this year was $2.356 billion—down nearly 22% from $3.009 billion in the first half of 2018, with the company that topped that list, Moderna Therapeutics, garnering $625 million in private financing. Moderna raised only 90% of that staggering sum, $563 million in net proceeds, a few months later in December 2018, when it launched the largest initial public offering for a U.S. biotech.

None of this year’s top-10 companies approached Moderna’s total during January–June 2019. Indeed the top-ranked company on this year’s GEN A-List collected just two-thirds as much capital as Moderna did in the first half of last year—thanks to a $325 million Series B financing announced on July 9, four months after a news report had the company planning to launch an IPO.

Just off the top-10 list at No. 11 was Beijing InnoCare Pharma Tech (InnoCare?), which on January 4 raised $160 million in financing, with the aim of continuing to advance clinical research of ICP-022, a novel BTK inhibitor targeting both oncology and autoimmune indications, and other candidates under development. Two Chinese companies appear in the top 10 as well as two European companies; the other six are from the U.S.

As with the January–June 2018 A-List, and GEN A-Lists published in 2015, in 2014, and in 2013, this year’s tally does not include companies that secured private funding and later went public, or filed registration statements to do so. Also not included are public companies that raised large sums of private funding.

 

10. Shanghai Allist Medical Technology Co. (Alice Medicine)

Amount: 1.18 billion yuan ($171.7 million)

Type: Series A financing

Date announced: May 23

Purpose: Promote the follow-up clinical progress of the core product effluentine mesylate, accelerate the commercialization of products, promote overseas cooperation, accelerate development of new drugs in research, the introduction of product pipelines, the construction of talent teams, and construction of research and development infrastructure.

Financing leader(s): Shiyu Capital

Financing partners: Zhengxin Valley Innovation Capital, Weifanghe, Gongqingcheng Hanren, Yuansheng Venture Capital, Gaoke Xinyi, Gaoke Xinchuang, Guotou Chuanghe, Deyi Capital, Huaxin Century Investment, Qianlong Capital

 

9. Arvelle Therapeutics

Amount: $180 million 1

Type: Series A financing

Date announced: February 15

Purpose: Acquire exclusive rights from SK Biopharmaceuticals to develop and commercialize Cenobamate in Europe. 2

Financing leader(s): LSP

Financing partners: NovaQuest, BRV Capital Management, Andera Partners, and H.I.G. BioHealth Partners 3

 

8. Maze Therapeutics

Amount: $191 million

Type: Launch capital

Date announced: February 28

Purpose: “Translating genetic insights into new medicines” through better understanding of the natural disease protection provided by genetic modifiers. The company combines studying natural human genetic variation worldwide with conducting large-scale experiments of gene perturbations.

Financing leader(s): Third Rock Ventures and ARCH Venture Partners

Financing partners: GV, Foresite Capital, Casdin Capital, Alexandria Venture Investments, and other undisclosed investors.

 

7. Schr?dinger

Amount:?$195 million 4

Type: Unspecified financing rounds

Dates?announced:?May 19; January 4 4

Purpose: Support continued growth and innovation of its computational platform and expansion of its drug discovery pipeline (both rounds).

Financing leader(s):?None specified (May);?Bill and Melinda Gates Foundation Trust and WuXi AppTec’s Corporate Venture Fund (January)

Financing partners:?In May, new investors Invus, Pavilion Capital, Oculus co-founder Michael Antonov through his investment fund, Tubus Management, Laurion Capital Management, and others were joined by previous investors ?Bill and Melinda Gates Foundation Trust, WuXi AppTec’s Corporate Venture Fund, Deerfield Management, Baron, Qiming Venture Partners, and GV (formerly Google Ventures). In January, investors included Deerfield Management, Baron, Qiming Venture Partners, and GV (formerly Google Ventures).

 

6. Tempus

Amount: $200 million

Type: Series F financing

Date announced: May 30

Purpose: Further enhance operations and accelerate its expansion into new therapeutic areas and geographies. Tempus seeks to build the world’s largest library of molecular and clinical data, starting with cancer, as well as an operating system to collect, sort, and analyze that data, in order to improve its accessibility and utility to physicians.

Financing leaders: None specified

Financing partners: Baillie Gifford, Franklin Templeton, NEA, Novo Holdings, Revolution Growth, and funds and accounts managed by T. Rowe Price

 

5. MGI

Amount: “Exceeded” $200 million 5

Type: Series A financing

Date announced: May 9 5

Purpose: Further strengthen the research and development and production of new gene sequencers, create a comprehensive product layout around digitalization of life, and commit to market development and “ecological construction” of the gene sequencing industry.

Financing leader(s): None specified

Financing partners: CITIC, Jinshi Capital, Songhe Capital and Dongzheng Capital

 

4. Anthos Therapeutics

Amount: $250 million

Type: Launch financing

Date announced: February 27

Purpose: Advancing next-generation targeted therapies for high-risk cardiovascular patients.

Financing leader(s): Funds managed by Blackstone Life Sciences, which will control the development of the company’s products.

Financing partners: Novartis 6

 

3. Century Therapeutics

Amount: $250 million

Type: Launch financing

Date announced: July 1

Purpose: Advance multiple programs into the clinic for hematologic and solid malignancies based on company’s induced pluripotent stem cells (iPSCs) allogeneic cell therapy platform.

Financing leader(s): Leaps by Bayer, the venture investment arm of Bayer ($215 million)

Financing partners: Versant Ventures, Fujifilm Cellular Dynamics Inc. (FCDI)

 

2. ADC Therapeutics

Amount:?$303 million 7

Type:?Series E financing

Date announced: July 9,?June 12 7

Purpose: Fund preparations for a potential BLA for ADCT-402 (loncastuximab tesirine) in relapsed or refractory diffuse large B-cell lymphoma (DLBCL) in the second half of 2020, as well as preparations for a pivotal Phase II trial of ADCT-301 (camidanlumab tesirine) in Hodgkin lymphoma.

Financing leaders: None specified

Financing partners: Unnamed U.S.-based “blue-chip institutional investor” ($25 million); unnamed existing and new investors 7

 

1. BioNTech

Amount: $414.8 million 8

Type: Series B financing; equity investment

Dates announced: July 9; January 4

Purpose: Support the continued advancement of BioNTech’s therapeutics pipeline and manufacturing infrastructure (Series B); expansion of research collaboration and co-development of the first cancer immunotherapy candidate from the companies’ collaboration, which was entering clinical testing in multiple solid tumors.

Financing leader(s): Fidelity Management & Research Co. (Series B); Sanofi (equity investment)

Financing partners: New and existing investors, including Redmile Group, Invus, MiraeAsset Financial Group, Platinum Asset Management, Jebsen Capital, Steam Athena Capital, BVCF Management, and the Struengmann Family Office (all for equity investment)

 

 

References

1. Figure disclosed by financing leader LSP in a February 15 press release. Arvelle’s own release, issued a day earlier, only gave the amount raised as “over $100 million.” However, on July 20, Korean Investors, a publication of The Korea Economic Daily, reported the figure as $134 million, stating that the number had been “corrected” by an unnamed source within KB Investment Co. Ltd. that said invested $10 million additionally.

2. Arvelle agreed to pay SK Biopharmaceuticals $100 million upfront, up to $430 million in payments tied to achieving regulatory and commercial milestones, plus royalties on net sales generated in Europe. Cenobamate was discovered and developed by SK Biopharmaceuticals from inception through to the acceptance of an NDA by the FDA. SK filed an NDA in?November 2018?that was accepted by the agency in?February 2019, with a PDUFA date of?November 21, 2019. Arvelle said in February it intends to file a Marketing Authorization Application (MAA) based on data generated from SK Biopharmaceutical’s global clinical trial program.

3. Axovant Sciences will receive a 5% preferred equity stake in Arvelle.

4.?Schrodinger announced that it raised?$110 million in May, and $85 million in January.

5. MGI, a gene sequencing equipment subsidiary company of BGI Group, said the funding was “the largest amount of capital raised in the genetic field in China in 2018,” though it had not been disclosed until May 2019.

6. Novartis will retain a minority equity interest in Anthos, the company said. As part of the launch, Novartis licensed to Anthos MAA868, an antibody directed at Factor XI and XIa, key components of the intrinsic coagulation pathway. According to Anthos, MAA868 has the potential to prevent a variety of cardiovascular disorders with minimal or no bleeding risk within a new long-acting treatment paradigm, which would provide major advantages over conventional standards of care.

7. On July 9, ADC Therapeutics announced the final close of a $303 million Series E financing—a $103 million expansion that was in progress June 12, when the company announced “completion” of the financing at $276 million.

8. Amount includes $325 million Series B financing and €80 million ($89.8 million) equity investment by Sanofi.

This site uses Akismet to reduce spam. Learn how your comment data is processed.