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Finance_Scrip

The amount of venture capital raised in the US by biopharmaceutical companies fell 15.2% to $3.9bn in the first quarter of 2019, but it still was an impressive quarter, ranking as the second-largest first quarter ever for the industry with an average deal size that remained above $20m for the second year in a row.

The first quarter of this year had a lot to live up to after 136 biopharma firms raised $4.6bn in the first three months of 2018. (Also see "Finance Watch: VC Investment Soars In Q1, Putting Biopharma On Track For A Record Year" - Scrip, 15 Apr, 2018.) However, while the total dollar amount fell in 2019's first three months, the number of VC deals rose 11% to 151, according to data from the Pitchbook-NVCA Venture Monitor, a report produced by the venture capital-tracking firm Pitchbook with the National Venture Capital Association (NVCA).

The average VC deal size for biopharma companies in 2018 was $24.3m, although last year's first quarter was particularly spectacular with an average deal size of $33.8m. But the 2019 first quarter average of $25.8m per VC deal still is impressive, because no year prior to 2018 had an average deal size above $20m, according toScrip's analysis of the Venture Monitor data (see table below).

Those data illustrate the increasing frequency of biopharma VC mega-deals – venture capital deals exceeding $100m. The largest venture capital financings by drug developers in the first quarter of this year included:

New VC Deals: Fusion Funded With $105m Round

When so many companies are raising $100m-plus rounds, it becomes less shocking to see triple-digit financings, such as Fusion Pharmaceuticals Inc.'s $105m Series B round announced on April 2.

Fusion's financing was the second biopharma VC deal above $100m this month after the April 1 announcement of Pfizer Inc. spin-out SpringWorks Therapeutics Inc.'s $125m Series B round. (Also see "Finance Watch: Arteaus Comes Full Circle As Investors Monetize Emgality Royalties" - Scrip, 1 Apr, 2019.)

Fusion's large Series B to fund the development of its targeted alpha-particle radiotherapeutics was more than double the $46m Series A round it closed in 2017. (Also see "Finance Watch: Genocea, Mateon Shift Strategies, Cut Jobs To Preserve Cash" - Scrip, 27 Sep, 2017.) Varian and new investor OrbiMed led the Series B with participation from Perceptive Advisors, Pivotal bioVenture Partners and Rock Springs Capital and prior backers HealthCap, Adams Street Partners, Johnson & Johnson Innovation - JJDC Inc., TPG Biotech, Seroba Life Sciences, Genesys Capital and FACIT.

Fusion will use its new venture cash to advance and broaden the scope of its ongoing clinical program in targeted alpha therapeutics and to build on its pipeline of new radiopharmaceuticals and combination therapy strategies. Lead product candidate [225Ac]-FPI-1434 uses the precision targeting of an antibody to deliver alpha-particle emitting medical isotopes to cancer cells across multiple tumor types.

In addition to a $50m Series A round for newly launched Dyne Therapeutics, other new April financings include:

  • Cambridge, Mass.-based Aura Biosciences Inc., which is developing targeted therapies for ocular cancers, said on April 2 that it closed a $40m Series D financing led by new investor Medicxi. Institutional investors also participating in the round include Advent Life Sciences, Arix Bioscience, Chiesi Ventures, Columbus Venture Partners, LundekFonden Ventures and Ysios Capital. The proceeds will fund late-stage clinical development of Aura's lead candidate – light-activated AU-011 – for primary choroidal melanoma. Aura closed an $8m Series C round in 2016. (Also see "Venture Funding Deals: New Cash For Delinia, Peloton, Fortis & Others" - Scrip, 13 Oct, 2016.)

  • The Belgian firmAgomAb Therapeutics NV, which is developing agonistic antibodies for regeneration of damaged tissues, completed a €21m ($23.6m) Series A round, it said on April 3. The company is developing growth factor-mimetic agonistic antibodies (agomAbs) to regenerate damaged tissues in fibrotic, inflammatory, autoimmune and degenerative disease under a collaboration with argenx SE and based on research from the University of Torino, Italy, into the biology of hepatocyte growth factor (HGF). V-Bio Ventures and Ardent France Biotechnology co-led the Series A with participation from Boehringer Ingelheim Venture Fund, Omnes and Pontifax.

  • Uniondale, NY-based Angion Biomedica Corp. received a $4.76m Department of Defense (DOD) Congressionally Directed Medical Research Program (CDMRP) grant to support development of the anti-fibrotic agent ANG-3070 in the treatment of primary focal segmental glomerulosclerosis (FSGS), a form of chronic kidney disease. Angion previously received a $2.2m DOD Peer Reviewed Medical Research Program (PRMRP) grant to establish preclinical proof-of-concept that ANG-3070, a small molecule fibrokinase inhibitor, could delay or halt the progression of FSGS. The drug will be administered to patients with certain biomarkers. An investigational new drug (IND) application will be submitted to the US FDA in support of an upcoming clinical trial for ANG-3070 in the second half of 2019.

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