As we look towards November and wind up of 2021, we are actively preparing for JP Morgan (our outreach starts next week!) and getting excited to finally see so many of you in person again. The countdown is on!
The IPO & M&A markets – who’s hot and who’s not?
This week, BMO published its analysis of 2017-2021 YTD IPOs and M&A transactions by therapeutic area. The research found:
- Oncology companies have consistently been the largest category of IPOs (42% of the 258 IPOs analyzed).
- Cell therapy companies have recently become an important category within oncology more broadly, representing 20% of the 30 oncology IPOs in 2020 and 43% of the 37 oncology IPOs in 2021 YTD.
- Infectious disease companies have had the highest average post-IPO market values over the time studied (though this was helped in large part by the outperformance of five standout transactions); urology IPOs had the lowest.
- Infectious disease and oncology companies – particularly cell therapy companies – raised the largest average IPO proceeds.
- Infectious disease companies raised an average of $235M, with oncology companies raising an average of $178M. Oncology IPO proceeds were buoyed by companies in the cell therapy subcategory, which raised an average of $226/deal.
- Oncology companies have also dominated in M&A (in terms of total # transactions), but the most highly valued public company takeouts have been for companies working in specialty therapeutics.
Consistent with industry-wide private equity trends biotech funds raised almost $3B in just the last month!
RA Capital kicks off third VC fund
Earlier this month, RA Capital Management closed its third “Nexus” fund at $880M. Similar to RA’s prior two funds, Nexus 3 will work in tandem with RA’s evergreen fund to invest in therapeutics, diagnostics and other life sciences areas. Peter Kolchinsky and Rajeev Shah, two managing partners at RA Capital, have managed over 200 investments in private companies since 2012, and tend to invest in companies leveraging technology to anticipate and solve the problems of the future. Though its focus has been on therapeutics, RA Capital has increased its presences across the diagnostics, devices, tools and vaccines spaces.
Sofinnova Partners Raises €472 ($548) Million to Form Largest Early-Stage Healthcare VC Fund in Europe
Sofinnova Partners closed an early-stage healthcare venture fund, Sofinnova Capital X, oversubscribed at €472 ($548) million. This new fund brings Sofinnova’s total funding to over €1 billion in the last 12 months across its multi-fund platform. Sofinnova Capital X will invest in the most promising biopharma and medical device start-ups that seek to transform patient lives through addressing significant unmet medical needs. Capital X will create value across a portfolio of groundbreaking innovations in healthcare, and will be the largest healthcare fund dedicated to company creation and early-stage investments in Europe.
UBS launches $650M fund with MPM
UBS has dipped into the biotech fundraising space with a contribution of $650 million into MPM Capital’s second impact fund focusing on oncology. UBS’ contribution comprises a majority of MPM’s $850M fund, and this total sum represents the largest impact investment fund the biotech sector has seen to date. This fund will focus primarily on private companies, with an allocation of 80/20 for private and public companies, respectively. The investors will be platform and technology agnostic, and announced their intention to invest in a variety of cell, gene and RNA-based therapies. On the philanthropic front, UBS and MPM are promising to donate a share of revenues and “success fees” to the UBS Optimus Foundation and the American Association for Cancer Research, which is structured to not impact investor returns.
Frazier Healthcare Partners raises oversubscribed $830M public fund
Also in recent weeks, Frazier closed the Frazier Life Sciences Public Fund –its first dedicated public life sciences fund — which will invest long-only in small- and mid-cap public biotech companies. While Frazier’s announcement did not include much detail on the fund’s investment strategy or focus, the team told FierceBiotech that they’ve identified themes from prior investments, which will inform stock picking moving forward. Specifically, the firm will focus on (1) situations where it can obtain confidential information under CDA; (2) companies that are recovering from a setback; and (3) finding companies off the beaten path. They will also look to invest in therapeutic areas with a favorable FDA regulatory environment and where value inflection can be achieved with a reasonable number of patients in clinical trials.
The overall markets rebounded this week, with the NASDAQ, DJIA and S&P 500 closing up 2%, 1% and 1%, respectively. The VIX increased by 10% this week, sitting at 16.5 as of market close on 10/28. Biotech markets went up as well, with the NBI, XBI and BTK gaining 1%, 2% and 1%, respectively.
Biotech public capital markets have continued to be active, with a number of IPOs, follow-ons and SPACs pricing in recent weeks, including the following:
- IPOs: Cognition Therapeutics ($45.2M), Entrada ($181.5M), IsoPlexis ($125M), Pyxis Oncology ($168M), Theseus Pharmaceuticals ($160M), Ventyx Biosciences ($174.3M), Xilio Therapeutics ($117.6M)
- Follow-Ons: ADMA Biologics ($57.5M), Agile Therapeutics ($22.7M), Apollo Endosurgery ($75M), Bicycle Therapeutics ($201.3M), CohBar ($15M), Iveric Bio ($150.8M), Relay Therapeutics ($350M), Repare Therapeutics ($88M), Osmotica Pharmaceuticals ($35M), Sarepta Therapeutics ($500M), Xenon Pharmaceuticals ($345M)
- SPAC: Abbisko Therapeutics ($226M)
In addition – and consistent with the incredible number of private funds raised in recent months – there were a number of private financings over the past few weeks, including:
- Private: Abalos Therapeutics (Series A Extension, €43M); AffyImmune Therapeutics (Series A, $30M); AUM Biosciences (Series A, $27M); Axial Therapeutics (Series C, $37.3M); Cambrian Biopharma (Series C, $100M); Cardurion Pharma (Undisclosed, $300M); Stern IR client Cedilla Therapeutics (Series B, $82.6M); CinCor Pharma (Series B, $143M); DNA Script (Series C, $165M); Egle Therapeutics (Series A, €40M); Exo Therapeutics (Series B, $78M); Immunai (Series B, $215M); iOmx Therapeutics (Series B, €65M); Kytopen (Series A, $30M); Mozart Therapeutics (Series A, $55M); Stern IR client Neumora (Series A, $400M with added equity investment of $100M); Pyramid Biosciences (Series B, undisclosed); Quanta Therapeutics (Series C, $60M); Radionetics Oncology (Series A, $30M); Stern IR client ReCode Therapeutics (Series B, $80M); Rectify (Series A, $100M); RedShift BioAnalytics (Series E, $20M); Sciwind Biosciences (Series C, $70M); Scout Bio (Series B2, $33M); ShouTI (Series B, $100M), Tentarix Biotherapeutics (Series A, $50M); Topelia Australia (Series A, $25M)