Friday, July 13, 2012

Recent fundraising or investment in biotechnology_2012



²         Biotech Venture Funding Drops 43% in First Quarter
²         Biotech fundraising sours in a bleak first half
²         Biotech venture rounds dwindle in Europe, tracking U.S. trend
²         Top Venture Capital Firms by Maureen Martino and Calisha Myers
²         Billions in new venture cash targeted at early-stage biotech efforts
²         Venture Capital Continues Its Migration in Q1 2012 as Investors Seek Safer Bets
²         How optimistic are you that the climate for biopharma funding will improve during the rest of 2012?
²         VCs See Sharp Drop in Biotech Investment Pressures push companies away from IPO market.
²         Biotechnology Funding Hits 4-Year High While Startups Seek New Investments


Biotech Venture Funding Drops 43% in First Quarter May 03, 2012  By Donald Zuhn --  Last month, the National Venture Capital Association (NVCA), a trade association representing the U.S. venture capital industry, released the results of its MoneyTree Report on venture funding for the first quarter of 2012.  The report, which is prepared by NVCA and PriceWaterhouseCoopers LLP using data from Thomson Reuters, indicates that venture capitalists invested $5.8 billion in 758 deals in the first quarter, which constituted a 19% decrease in dollars and a 15% decrease in deals as compared with the fourth quarter of 2011, when $7.1 billion was invested in 889 deals.   The report notes that the Life Sciences sector (biotechnology and medical device industries) and the Clean Technology sector saw marked decreases in both dollars and deals in the first quarter, with the drop in Life Sciences funding mostly due to decreased funding for the biotech industry.  While the biotechnology industry still managed to place second among the industries tracked by the NVCA in terms of dollars invested in the first quarter, with $780 million invested in 99 deals, this constituted a 43% drop in dollars and a 14% drop in deals over the fourth quarter.  The medical device industry picked up some of the slack for the Life Sciences sector, with $687 million invested in 72 deals, which constituted a 33% increase in dollars and a 6% drop in deals.  The number of deals in the Life Sciences sector dipped to its lowest point since the first quarter of 2009.  Overall, eleven of the seventeen sectors tracked by the NVCA saw decreases in dollars invested in the first quarter.  Tracy Lefteroff, the global managing partner of the venture capital practice at PricewaterhouseCoopers noted that "[v]enture capitalists remained cautious during the first quarter after a lackluster fourth quarter in the public markets, as evidenced by the shift from investing in earlier stage companies to a focus on later stage companies in Q1," but suggested that given the improvement in the public markets in the first quarter, "we could see VCs return to placing their bets on seed stage companies in the coming quarters."  She also indicated that "[a] more active M&A market may be the reason that the Biotech industry experienced a decline in investing in Q1."  NVCA president Mark Heesen pointed out that "[t]he industry continues to contract and consolidate which is beginning to manifest itself in fewer dollars being invested in fewer deals," but added that "[a]s innovation continues to advance at a very quick pace, we suspect that many seed stage companies are being funded in stealth mode, forming a pipeline that is not yet visible to the public eye."         


Biotech fundraising sours in a bleak first half  July 11, 2012 | By John Carroll The flow of venture capital dollars into the biotech industry is rapidly slowing down. In its snapshot of second quarter trends, Bloomberg Industries is reporting that there were only 59 deals in the last quarter, with a woeful average of $9.3 million a deal. That amounts to the smallest financing amounts since '07, reports the Boston Business Journal. Overall, global VC flow into biotech plunged 43%, down to $550 million, with the lion's share going to U.S. companies.  European biotechs drew only $48 million of the total, notes the BBJ, the hometown newspaper to one of the world's largest biotech hubs. And Third Rock Ventures, which has been wheeling and dealing from the launch of its latest fund, proved the most active investor.  Those figures are in line with a bleak set of numbers drawn together by BioWorld's Peter Winter, who found that biotechs raised $2.76 billion in the second quarter, down 46.4%. For the full first half of the year, private and public biotechs raised only $7.9 billion, down 40% from the same period in 2011. And Winter bearishly interpreted the data as a bad sign for the months ahead.   
FierceBiotech Survey: Corporate Development Trends  FierceBiotech wants to hear from you. Please take a few minutes to answer a short survey about corporate development trends in the life sciences industry and we'll send you a $5 Starbucks Gift Card if you're among the first 50 qualified respondents. Click here to take the survey. Sign up for our FREE newsletter for more news like this sent to your inbox! To cap it off, we reported yesterday that biotechs are seeing shrinking amounts of total deal sizes for their licensing pacts so far this year. The financial squeeze is coming from every side, with M&A offering one of the few bright spots for industry investors as IPOs remain few and far between.        



Biotech venture rounds dwindle in Europe, tracking U.S. trend  April 30, 2012 | By John Carroll Fresh on the heels of the news of a disappointing quarter for biotech investing in the U.S., Dow Jones VentureSource has done the math for Europe and come up with an equally dispiriting set of stats.   Biopharma was the dominant category in the continent's healthcare industry, accounting for 26 deals that raised 108 million euros--out of 137 million euros for all of healthcare--compared to the same period a year ago. That represents a 16% drop in deals and a whopping 66% plunge in cash.  On the bright side, though, Europe saw a number of new funds come together in recent months. The Wellcome Trust has created a substantial new fund while Sir Chris Evans has been working at gaining government cash to back new ventures in Wales. Index Ventures, meanwhile, has joined with GlaxoSmithKline ($GSK) and J&J ($JNJ) on a new fund for startups, primarily in Europe. And the British government has assembled its own biopharma fund. That trend played out across all sectors for the European venture community.   
FierceBiotech Survey: Corporate Development Trends  FierceBiotech wants to hear from you. Please take a few minutes to answer a short survey about corporate development trends in the life sciences industry and we'll send you a $5 Starbucks Gift Card if you're among the first 50 qualified respondents. Click here to take the survey. Sign up for our FREE newsletter for more news like this sent to your inbox! "The difficult fund-raising environment and shrinking number of exits means less money is flowing into venture firms and, therefore, less is flowing out," said Jessica Canning, global research director, Dow Jones VentureSource. "But there are some positive signs. European venture fund-raising rose 8% in the first quarter and financing deals didn't drop as significantly as investment which means VCs are still finding companies they want to support."  Last week Thomson Reuters reported that venture investing in U.S. biotech companies plunged 43% in the first quarter of the year compared with the strong numbers posted for the last three months of 2011. Analysts at the National Venture Capital Association and PricewaterhouseCoopers tracked 99 deals that attracted $780 million in investments.        



Top Venture Capital Firms by Maureen Martino and Calisha Myers  We here at FierceBiotech regularly chronicle the largest venture capital deals in biotech. It's a great way to keep an eye on up-and-coming companies with groundbreaking programs in their pipelines. But every time we release a venture capital report, at least a few readers ask us for something else: an in-depth look at the venture capital firms behind the funding that supports these small companies. So with the help of data from the National Venture Capital Association, we've compiled a list of the most active life science investors. The 17 firms on this list have done 14 or more deals since the beginning of 2008. The largest biotech investor--Domain Associates--has participated in 41 deals in the last year and a half.  The VC firms on this list include both life science-only firms as well as groups that invest in a variety of industries. In the process of our research, we spoke to a number of venture capitalists about what they look for when they choose to back a company. Despite the diversity of the firms, some clear trends emerged:  All the VCs agreed that having a strong management team that investors trust is one of the most critical factors when choosing whether or not to financially support a new company. Many VCs even had a list of entrepreneurs or academics they'd worked with numerous times.   Times are changing, and our healthcare system is likely to undergo a dramatic shift in the coming years. Less emphasis will be placed on incremental improvements to existing drugs. Rather, in order to have a successful drug program, biotech and pharma companies must develop game-changing therapeutics. VCs are taking this into account as they select their investments now; they're most interested in funding companies with advancements that address unmet medical needs.  While VCs are being selective with their money, the economic crisis hasn't has a substantial negative impact on their activities. For one thing, biotech investors are in it for the long haul--they're not very susceptible to short-term problems. In fact, biotech's desperation for cash has led to better deal terms for VCs. And companies that do secure funding are using it wisely, since they can't afford to waste money anymore. In many cases, the cream of the crop are able to raise funding while less promising ideas fall by the wayside. So without further ado, take a look at this list of the most active biotech and pharma life science investors.  1. Domain Associates 2. HealthCare Ventures 3. Polaris Venture Partners* 4. MPM Capital* 5. Alta Partners  6. ARCH Venture Partners  7. Flagship Ventures  8. SV Life Sciences Advisers* 9. Sanderling Ventures* 10. Kleiner Perkins Caufield & Byers 11. InterWest Partners* 12. Sofinnova Ventures* 13. Burrill & Company  14. New Enterprise Associates* 15. OrbiMed Advisors  16. Quaker BioVentures  17. Venrock Associates*        



Billions in new venture cash targeted at early-stage biotech efforts  April 4, 2012 | By John Carroll Early this year, the analysts at the National Venture Capital Association were hammering away at a perceived crisis in early-stage funding, lamenting signs that startups were having a terrible time rounding up the cash needed to hire teams and get programs in the clinic. But the VC activity in the first quarter of 2012 has dulled the edge of their argument. The analysts at Burrill & Co. took out their calculators and concluded that $2.6 billion in new venture funds for translation and early-stage work materialized in the U.S. and Europe in the last two months, with a $760 million partnership between Domain Associates and Rusnano leading the charge.  Some of this is charity money. Wellcome Trust has a new $317 million fund open for business. Some is Big Pharma money, like Merck Canada's decision to chip in to a $100 million fund for Quebec and a $200 million gamble by GlaxoSmithKline ($GSK), Johnson & Johnson ($JNJ) and Index. Governments are stepping in: A new venture group Sir Chris Evans put together in Wales is intended to swell to $350 million. Steven Burrill, who has gathered venture cash of his own, was particularly intrigued by a $250 million venture by Cleveland's University Hospital, earmarked for translational work and early- to mid-stage trials.  In addition to Burrill's numbers, some significant classic venture cash has been coming into play as well, like the $270 million Flagship fund announced in January. And BioWorld today reports that biotech venture rounds swelled to $391 million in the U.S. in the first quarter, up a whopping 34% over the same period in 2011.   
FierceBiotech Survey: Corporate Development Trends  FierceBiotech wants to hear from you. Please take a few minutes to answer a short survey about corporate development trends in the life sciences industry and we'll send you a $5 Starbucks Gift Card if you're among the first 50 qualified respondents. Click here to take the survey. Sign up for our FREE newsletter for more news like this sent to your inbox! "These efforts reflect broad attempts to forge creative new models for funding translational research and spur development of important new therapies," says Burrill. "It also demonstrates that governments across the globe, despite facing fiscal pressure, see the importance of investing in the life sciences to build innovation-based economies that can provide high quality jobs."   There's a back story to the sudden explosion of early-stage cash. The NVCA has been using the lack of funding to argue that Congress needs to pass new legislation that would expand the FDA's accelerated approval initiative, making it easier for biotechs to get an approval faster. Faster approvals, they add, would inspire investors to put more money into biotech companies.          



Venture Capital Continues Its Migration in Q1 2012 as Investors Seek Safer Bets Apr 25, 2012 In terms of IPOs, seven companies went public raising $480 million compared with $521 million raised by eight IPOs in the year-ago quarter. Alex Philippidis  Though some investors are still taking risks, many are playing it safe by selecting companies that have good funding track records. [© ArchMen - Fotolia.com] Comments Email ThisShare This Text This Related Content Print This Email The Editor (Page 1 of 1) The migration of venture capital from biopharma companies stepped up during the first three months of 2012, seemingly unaffected by recent signs of life in the IPO market. The dollar value of VC deals fell 18% during the first quarter from year-ago numbers, while the number of deals was relatively flat.  Just $780 million was invested in a total 99 biopharma companies during Q1 ’12, compared with $949 million in 97 deals during the first quarter of 2011, according to the quarterly MoneyTree Report, issued April 20 by PricewaterhouseCoopers (PwC) and the National Venture Capital Association (NVCA), based on Thomson Reuters data.  The report also showed a sharp year-over-year drop in first-sequence, or Series A, investment activity to almost $93.2 million in just 10 deals from $134.3 million in 30 deals. The results confirmed a continuing trend by biopharma startups toward larger first-sequence deals coming later in a company’s life cycle. The average size of Series A financing rounds more than doubled to $9.3 million in Q1 ’12 compared with almost $4.5 million a year earlier.  Companies won the few available first-sequence deals by persuading investors that they’ll get their money back sooner because the startups are more solidly run than Series A winners from before the Great Recession. “The silver lining is that the deals that are getting funded today are really high quality,” Tracy T. Lefteroff, global managing partner, venture capital and life sciences industries services with PwC, told GEN.  The venture investors are being very selective with what they fund. With the timeframes that it takes to get liquid in the life sciences space, they can’t afford to make many mistakes. The deals that are getting funded are deals that have a clear regulatory pathway to the FDA and clearly have great management teams and intellectual property that’s protectable.”  That means, Lefteroff explained, today’s first-sequence companies are further along in development than their counterparts from as recently as five years ago: “A lot of times, there is already human data.”  Series A investors are basically playing it safe. “It’s a fear versus greed thing on the investment side of things, and when things are uncertain, that elevates the fear,” Robert More, general partner with Frazier Healthcare, told GEN. Not that there’s anything wrong with that, he added: “I think there should always be a valley of death. If everything’s getting funded, that’s not a good environment either and that leads to bubbles."   
Venture Cap  Playing it safer often means choosing companies for first-sequence funding that have good funding track records. For example, ImaginAb, which won $12.5 million in its Series A round, maintains a dozen partnerships with global biopharma companies to develop companion diagnostic imaging agents for use alongside therapeutic antibodies. Novartis Venture Funds led the round, which included Merieux Developpement, Nextech Invest, Cycad Group, and Momentum Biosciences.  Also, 4s3 Bioscience, a gene therapy developer focused on orphan neuromuscular disorders, won $20 million in Series A funding from KLP Enterprises. The company uses technology licensed from UCLA and enjoys a track record of winning funding from private and public funders. In 2008, a year after its founding, 4s3 won seed funding from Genzyme Ventures. Two years later, it borrowed $600,000 from the quasi-public Massachusetts Life Sciences Center, and the loan was repaid last month with interest for a total $685,134. 4s3 has also won a $260,291 grant from the Muscular Dystrophy Association, a combined $244,479.24 in 2009 and 2010 from the Qualified Therapeutic Discovery Program, and a $195,590 grant from National Institute of Neurological Disorders and Stroke. The two largest financings during Q1 saw institutional investors and big pharma pour capital into private companies. ADC Therapeutics was launched with $50 million led by Celtic Therapeutics Management along with co-founders of Spirogen, whose platform technology is the basis for the 10 antibody-drug conjugate oncology projects the new company will work to commercialize.  Also, Celladon received $43 million to advance its lead candidate, the enzyme-replacement therapy for advanced heart failure, Mydicar. The company last year published positive results from a Phase II trial with Mydicar, helping it win FDA’s Fast Track designation. The financing was led by new investor Pfizer Venture Investments, with four other new investors that include Novartis Venture Funds and Lundbeckfond Ventures.  Two companies raised $42 million each. Aragon Pharmaceuticals won Series C venture funding for advancing lead compound ARN-509 for castration-resistant prostate cancer, led by new investor Topspin Fund. A Phase II trial began in November and is fully enrolled “well ahead of schedule,” according to the company.  Supernus Pharmaceuticals combined the $27 million it raised by selling its TCD Royalty Subsidiary with $15 million in venture debt. Supernus said it will use the money to commercially launch its two lead candidates in epilepsy, SPN-538 (extended-release topiramate) and SPN-804 (extended-release oxcarbazepine)—if the submitted NDAs win approval—as well as to continue development of pipeline drugs to treat central nervous system diseases.   



How optimistic are you that the climate for biopharma funding will improve during the rest of 2012?  Helping elevate uncertainty in biopharma financing is the performance of the long-dormant IPO market. According to Burrill & Co., seven companies worldwide went public during Q1, raising a combined $480 million, compared with the $521 million raised by eight IPOs in the year-ago quarter. All but one company was compelled to lower its initial share price before hitting the market.  On the brighter side, this year’s public companies saw their share prices rise an average 20% after their IPO during Q1, after excluding Merrimack Pharmaceuticals, which saw its share price fall 13.7% from the initial $7 on March 28, its first day of trading. As of April 24 it was valued at $7.10 per share.  But that activity is a far cry from the robust pre-recessionary IPO market. “I think 10 years ago we did a survey on entrepreneurs and CEOs in the biotech industry, and 80% of them thought they were going to be public companies someday,” More pointed out. The inverse is true or perhaps even more beyond that today.” People are now building companies to push projects forward to the point where they are more appropriate for sale or license to a big biopharma company, More added, saying that it is very much the exception that companies are looking to go public now; it is no longer the rule.  Some senior biopharma executives and industry groups like the Biotechnology Industry Organization and Pharmaceutical Research and Manufacturers of America have blamed the shrinking VC market in part on FDA’s post-Vioxx shift toward more risk-benefit analysis of drug candidates. Leaders have termed the process too slow and too uncertain for companies, while FDA has trumpeted figures showing it has picked up its pace of drug approvals.  Several bills promising speedier drug reviews are pending in Congress. They include the fifth authorization of the Prescription Drug User Fee Act, the Transforming the Regulatory Environment to Accelerate Access to Treatments Act, the Faster Access to Specialized Treatments Act, and the Advancing Breakthrough Therapies for Patients Act of 2012. When and if these policies get enacted, FDA will have its work cut out for them, as will companies and other stakeholders who have blamed the regulatory agency for impacting the financing markets.             



VCs See Sharp Drop in Biotech Investment Pressures push companies away from IPO market. MARIE DAGHLIAN The Burrill Report   Life sciences venture investment is expected to drop 30 percent year-on-year until it falls to about $2.5 billion, according to a panel of venture capitalists speaking at a recent dealmaking conference in San Francisco. Patrick Herron, a partner at Frazier Healthcare, who first offered the dire projection said he expects investment to level off by 2015, but says his limited partners have told him that before they put more money into venture funds they want to see some distributions. In the current climate, that means through a strategic sale rather than an IPO. What I think changes as liquidity starts to happen through strategic sales and other exits, is that’s when limited partners will start to reload,” he says. Such pressures are driving venture investors to steer their portfolio companies away from the IPO market and instead toward strategic sales where they can get better multiples and lock in returns on their investments. As we think about investing the first dollar into a company, we want to see a path to liquidity/sale in under five years,” he says. “That’s dramatically different than seven or eight years ago. Now you’ve got to find a path, you need to know who your buyer is, and do that work before you write a check.” Just $780 million was invested in venture-backed biotechs in the first quarter of 2012, a rate of investment, if projected for the whole year, that would come out to roughly $3.1 billion. That represents a huge drop off from the estimated $4.7 billion that VCs put into biotech companies in 2011, but is not surprising considering the difficulties in the current fundraising environment. The rate at which venture capitalists are funding companies is outpacing the rate at which they are raising new funds, leading to a multibillion dollar gap that Abingworth Management’s Jonathan MacQuitty says is “one of the hidden disasters of the industry of which many people are unaware. He likens it to a potential biotech equivalent of “The Hunger Games” where only one company will get funding for every 25 that are trying to raise money. MacQuitty was one of four VCs on a 2012 Deloitte Recap Allicense conference panel May 2 that examined the state of life sciences venture investing. All the VCs on the panel agreed that we are undergoing an inevitable contraction in biotech venture financing that will last for several years. Patrick Herron, a partner at Frazier Healthcare, sees a 30 percent drop in financings year-on-year until it reaches about $2.5 billion. He’s optimistic though that it will level out. He expects that the level of investments in venture funds versus the level of investments by VCs will normalize by 2015. M&A transactions of venture-backed biotechs did generate good returns in 2011, even with most of them being structured deals. The total upfront value of transactions was about $5.3 billion, according to a BioCentury analysis. Although this is good for VCs, they have a backlog of companies they need to find exits for in order to provide the liquidity their limited partners need. Abingworth’s MacQuitty thinks life sciences venture capital funds will raise and invest about $2.5 billion a year. He is skeptical that many partners will return to investing in biotech. “They’re just too many people who feel the combination of IPO, FDA, and reimbursement has sucked the energy out of the sector,” he says. “We find people saying we would like to invest the capital but our investment committee won’t allow us to invest in the sector ever again.” While venture capitalists and their limited partners may still be able to make good money at this level, it will become even more difficult for entry level biotechs to find the money to develop their technologies. Most of the VCs concurred that investing in the first round will not get them the multiples they need. The only time it’s the A round is when it is the only round to be done,” says Herron. “Right now it really is a ‘have and have not’ deal.” With the emphasis on build-to-sell, companies that are getting funded are getting a big initial funding with the hope that they will be sold before needing another round of private investment. This model may work for the few, but it is making it very difficult for the many biotechs that will go unfunded or struggle to scrape together funding from alternate sources. Whether it will sort itself out in the end remains to be seen, but for now it still seems like the Big Pharmas and Big Biotechs are pulling the strings.             


Biotechnology Funding Hits 4-Year High While Startups Seek New Investments By Ryan Flinn - Jan 21, 2012 Venture capital investment in biotechnology increased 22 percent last year, while the number of those receiving their first funding declined. Funding for medical-device and equipment companies also rose 20 percent, with first-time funding falling to a 16-year low, the National Venture Capital Association and PricewaterhouseCoopers LLC said today in a report. Life sciences VCs are increasingly focusing on later- stage opportunities that carry less risk, from a clinical and regulatory perspective,” said Jonathan Leff, a managing director at the New York-based venture-capital firm Warburg Pincus LLC, on a conference call yesterday. “This reflects a serious breakdown in the model that has fueled the U.S. leadership in life sciences innovation.” Venture firms spent $4.73 billion on 446 biotechnology companies in 2011, the highest dollar amount since 2007, and $2.81 billion on 339 medical device and equipment makers. About 153 life sciences companies -- a category that combines biotechnology and medical devices -- received their first round of funding last year, the lowest since 1996. The Food and Drug Administration approved 30 new drugs in 2011, a 43 percent increase from the year before, and the most since 36 were cleared in 2004. Of those, 15 won expedited approval as “priority” drugs, for therapies that may provide major advances in treatment, and 13 were developed in part with venture capital funding, Leff said.  
Current View The approvals “cannot be seen as a reflection of the health of life-sciences venture-capital investing today,” Leff said, because most of the drug therapies had been in development for a decade or more. The current decline in early stage funding will be seen a decade from now, he said. It will inevitably show up in future years as fewer new innovative drugs and medical devices come to market,” Leff said. Last year’s biggest deal across all sectors was a $300 million investment in Irving, Texas-based Reata Pharmaceuticals Inc., a developer of experimental anti-inflammatory drugs, by an undisclosed firm, according to the report. About 42 percent of venture capitalists surveyed last month expect fewer life sciences companies to sell shares to the public for the first time this year, compared with 18 percent who expect more initial public offerings in the industry, according to the venture capital group. In terms of funding, 58 percent expect U.S. investments in biopharma will decrease in 2012, with 7 percent estimating an increase.  

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