The investor funk that kept biotech stocks down for about half of this year helps explain why private funding of early-stage biopharmas slipped during the first three quarters of 2016, according to one key measure. Between January and September, a total $5.3 billion in venture capital was invested in 305 early-stage companies (compared with $6 billion in 371 in the same period last year), according to the quarterly MoneyTree™ Report published by PricewaterhouseCoopers (PwC), based on data from Thomson Reuters.
But this year’s GEN tally of early-stage drug and diagnostic developers that closed on millions of dollars in private funding during 2016 (as of deadline on December 2) tells another story.
Of the top 10 financings that made this List, four were announced since October 1, reflecting renewed investor confidence in biopharma—a sentiment that gained steam in the weeks since Donald Trump’s election caused market-watchers to conclude that Washington will be unlikely to contain ever-rising drug prices once he takes office.
That bounceback aside, the combined amount of the top 10 “Young Company” biotech financings within this year was down 8.4% from 2015—$2.030 billion, compared with $2.217 billion in 2015. This year’s top financing was recorded by the same company that topped last year’s list, and was even larger than the financing that topped the 2015 List.
As was the case with GEN Lists published last year, 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. None of the companies on this year’s list meets that category.
Also not included are public companies that raised large sums of private funding. Only one such company would have otherwise made this year’s list—MorphoSys, which on November 15 said it raised approximately €115 million (about $123 million) in a private placement in which it issued 2,622,088 new shares to institutional investors in Europe and North America at €44 ($49) per share.
#10. DalCor Pharmaceuticals
Amount: $110 million1
Type: Series B financing
Date announced: April 19, May 131,2
Purpose: Fund a Phase III trial of dalcetrapib, a CETP inhibitor, in patients who have recently experienced acute coronary syndrome
Financing leaders: New investors Caisse de dépôt et placement du Québec, the Fonds de solidarité FTQ, and CTI Life Sciences; Founding investors Sanderling Ventures and André Desmarais
Additional financial partners: Undisclosed investors
#9. Unity Biotechnology
Amount: $116 million
Type: Series B financing
Date announced: October 27
Purpose: Expand ongoing research programs in cellular senescence and advance the first preclinical programs into human trials
Financing leader: None denoted
Financial partners: ARCH Venture Partners, Baillie Gifford, Fidelity Management and Research Company, Partner Fund Management, and Venrock (all new investments); Other investors include Bezos Expeditions, the investment vehicle of Amazon.com CEO Jeff Bezos, and existing investors WuXi PharmaTech and Mayo Clinic Ventures
#7 (tie). Denali Therapeutics
Amount: $130 million
Type: Series B financing
Date announced: August 25
Purpose: Fund the company’s therapeutic pipeline and blood-brain-barrier delivery technology platform
Financing leader: Baillie Gifford
Additional financial partners: All of Denali’s founding investors—which include ARCH Venture Partners, F-Prime Biosciences, Flagship Ventures, and the Alaska Permanent Fund—as well as “several new and large institutional investors.”
#7 (tie). Zymergen
Amount: $130 million
Type: Series B financing
Date announced: October 11
Purpose: Accelerate growth to further support customers, in addition to recruiting top talent across software engineering, automation, and biology
Financing leader: SoftBank Group
Additional financial partners: New investors Iconiq Capital, Prelude Ventures, and Tao Capital Partners; Prior lead investor Data Collective; Return investors True Ventures, AME Cloud Ventures, DFJ, Innovation Endeavors, Obvious Ventures, and Two Sigma Ventures
#6. CStone Pharmaceuticals
Amount: $150 million
Type: Series A financing
Date announced: July 3
Purpose: Focus on addressing the specific needs of Chinese patients, by developing a pipeline that covers five therapeutic areas, including its core therapeutic focus of immuno-oncology, as well as cardiovascular diseases, rheumatoid arthritis, hematology, and autoimmune diseases
Financing leader: None specified
Financing partners: Oriza Seed Venture Capital, Boyu Capital, and WuXi Healthcare Ventures
#5. Intarcia Therapeutics
Amount: $215 million3
Type: Equity financing
Date announced: September 15
Purpose: Positioning company toward a “strong strategic and financial position” over the next 2–3 years as it prepares for the potential approval and launch late next year of ITCA 650 (continuous subcutaneous delivery of exenatide), a once- or twice-yearly therapy for the chronic treatment of type 2 diabetes; and the parallel progression of several novel pipeline programs in chronic diseases that include diabetes, obesity, and auto-immune/inflammation
Financing leader: None specified
Financial partners: Undisclosed new “world-class” institutional investors, family offices, a “large and long-term” VC/private equity fund of Lucion Venture Capital Group, and undisclosed existing investors “that have come into the company over the last 5–6 years”
#4. Human Longevity
Amount: “In excess of” $220 million
Type: Series B financing
Date announced: April 4
Purpose: Fund the growth and expansion of the company and its products: these include the first Health Nucleus, HLI’s comprehensive, genomic-enhanced, research-based health center; ongoing development of the HLI Knowledgebase which currently has more than 20,000 complete genomes coupled with phenotype data; the Comprehensive Cancer Program, and other sequencing programs
Financing leaders: None denoted
Financial partners: Illumina, Celgene, GE Ventures, and a “strong” participation from Series A investors, based in the U.K., Malaysia, Mexico, Australia, Kuwait, Hong Kong, and China, in addition to the U.S.
#3. BlueRock Therapeutics
Amount: $225 million
Type: Series A financing
Date announced: December 12
Purpose: Give company at least four years of runway; allow company to advance a number of programs into the clinic, with an initial focus on cardiovascular diseases and neurodegenerative disorders. Company aims to develop best-in-class induced pluripotent stem cell (iPSC) therapies
Financing leaders: Bayer and Versant Ventures.
Additional financial partners: None denoted
#2. Innovent Biologics
Amount: $260 million
Type: Series D financing
Date announced: November 29
Purpose: Accelerate the company’s continued development of its pipeline of biologic therapeutics, several of which have entered clinical studies
Financing leaders: Future Industry Investment Fund, a private equity fund managed by SDIC Fund Management Corporation Limited, a subsidiary of State Development & Investment Corporation; Other “blue chip” investors including China Life Private Equity Limited, Milestone, Ping An, and Taikang Insurance Group.
Additional financial partners: Existing investors Legend Capital, Temasek, and Hillhouse Capital
#1. Moderna Therapeutics
Amount: $474 million
Type: Equity financing
Date announced: September 7
Purpose: Continued growth of its clinical pipeline and accelerated advancement of development candidates into clinical studies; construction of a new Good Manufacturing Practice (GMP) manufacturing facility in anticipation of increasing clinical activities across therapeutic areas; sustained investment in its mRNA technology platform at the pace of $100 million per year; continued expansion into new therapeutic areas and modalities
Financing leader: None denoted
Financial partners: Existing institutional investors and “world-class” strategic pharmaceutical partners, all undisclosed; as well as new institutional investors from the U.S., Europe, and Asia, also undisclosed
References
1 Company announced it raised $100 million on April 19, then submitted a Form D filing to the U.S. Securities and Exchange Commission on May 13 disclosing that its total offering amount was $110 million.
2 Company also disclosed that it had raised $50 million in Series A financing “late in 2015.” That financing was not announced at the time.
3 In announcing the $215 million equity financing, Intarcia said it “expects a larger second close with additional top-tier investors in 4Q.” No addition announcements had been made as of December 2. The company’s Form D, submitted September 15, discloses a total offering amount of $600 million.
