FINANCE ROUNDUP: Six VC financings and a royalty deal
This article was originally published in Scrip
Biotechnology companies and their investors came back from summer break with a slew of venture capital funding rounds and a royalty deal, although it remains to be seen how many early-stage firms will remain financially independent with large biotech and pharmaceutical companies raising massive stockpiles of cash.
With an eye on mergers and acquisitions, biopharma industry observers are wondering which companies and assets Gilead Sciences Inc. and Biogen Inc. intend to buy with the $10bn and $6bn, respectively, that they are raising through the sale of senior unsecured notes. Recently funded private companies and those that are considering an initial public offering may or may not be of interest to Gilead, Biogen or their pharma peers, so they need new cash to get them to research and development milestones that could make them attractive to future big name partners.
Venture Capital Keeps Flowing
Several firms involved in drug development revealed new venture capital funding rounds during the post-Labor Day, four-day week of Sept. 8 to 11, led by biotech billionaire and former Abraxis Biosciences CEO Patrick Soon-Shiong's NantCell, which closed a $100m funding round, according to a US Securities and Exchange Commission (SEC) filing.
Soon-Shiong has spent a lot of time talking about his vision for connected health care – especially cancer care – during the past few years and he's invested a lot of money in a massive venture called NantWorks LLC with several subsidiaries tackling different parts of cancer diagnosis and treatment, including the cell-based immunotherapy firm NantCell.
Investors in NantCell's recent funding round were not disclosed in the company's Sept. 11 SEC filing, which could be a precursor to a future IPO. Soon-Shiong invested in Conkwest, now known as NantKwest, before the immunotherapy company grossed more than $200m in a late July IPO.
The table below highlights five other significant venture capital funding rounds that were announced during the short Labor Day week.
Company | Financing | Use Of Proceeds |
AveXis Inc.; Chicago, Illinois | The gene therapy specialist closed a $65m Class D common stock financing led by funds and accounts managed by T. Rowe Price Associates Inc. with participation from Deerfield Management, Roche Venture Fund, Venrock, Janus Capital Management LLC, Adage Capital Management LP, RA Capital Management, QVT Financial LP, Rock Springs Capital Management LP, Foresite Capital Management LLC, RTW Investments LLC, and Boxer Capital of Tavistock Life Sciences. | The funding round was backed by crossover investors that could support a future IPO. The capital primarily will help AveXis advance its existing spinal muscular atrophy (SMA) gene therapy, which is being tested in an ongoing Phase I clinical trial. The gene transfer therapy delivers fully-functioning copies of the survival motor neuron (SMN) gene to patients with SMA type 1 to boost their ability to produce the SMN protein. |
Laboratoris Sanifit SL; Palma de Mallorca, Spain | Ysios Capital led a €36.6m ($41m) Series C round with participation from Forbion Capital Partners, Lundbeckfond Ventures, Gilde Healthcare, Edmond de Rothschild Investment Partners, la Caixa and Baxter Ventures. | Sanifit is developing SNF472 for cardiovascular diseases linked to calcification in patients with end-stage renal disease (ESRD) undergoing hemodialysis. The Series C cash will fund the program through Phase IIb for cardiovascular diseases linked to calcification in ESRD and Phase II/III for calciphylaxis. A Phase Ib/IIa pharmacology study in hemodialysis patients is ongoing. |
Selecta Biosciences Inc.; Watertown, Massachusetts | OrbiMed was the largest investor in Selecta's $38m Series E round with participation from new investors, Sanofi-Genzyme BioVentures, Ridgeback Capital Management, Osage University Partners, AJU IB Investment, and Sphera Global Health Care Fund. All of the company's prior investors backed the Series E round, including Rusnano, Polaris Venture Partners, Flagship Ventures, NanoDimension and Leukon Investments. | Selecta is developing a novel class of targeted antigen-specific immune therapies, including SEL-212 – the first non-immunogenic biologic therapy for gout. The Series E round will fund ongoing Phase I and future Phase II clinical trials for SEL-212 and preclinical programs. Selecta also is developing first-in-class therapies for an undisclosed food allergy, celiac disease and type 1 diabetes in collaboration with Sanofi. |
ReViral; London
| Edmond de Rothschild Investment Partners and OrbiMed led ReViral's $21m Series A round with Brace Pharma Capital. The Wellcome Trust also converted a Seeding Drug Discovery Award loan into equity. | ReViral is developing antiviral drugs for diseases caused by respiratory syncytial virus (RSV). Its new funding will help the company advance lead drug candidate RV521 into proof-of-concept trials in 2016 and finance continued development of novel antiviral inhibitors targeting RSV fusion. |
Cognition Therapeutics (CogRx); Pittsburgh, Pennsylvania | Six years after its $1.2m Series A round, CogRx has raised 10 times as much money in its Series B. Golden Seeds led the $12m funding round with participation from Bios Memory SPV1, Cowtown Angels, Scale Investors, Dolby Family Ventures, Maine Angels and other life sciences investors. Prior backers Ogden CAP, PLSG Accelerator Fund, Tech Coast Angels, ACE Fund, Ariel Southeast Angel Partners and M5Invest Partners also invested in the Series B. | CogRx is focused on disease-modifying therapies for Alzheimer's and related neurodegenerative diseases. The company plans to advance its Alzheimer's therapy – a small molecule amyloid-beta oligomer displacement drug – into Phase I clinical trials by the end of 2015. The Series A funds also will be used to develop additional novel medicines for protein-misfolding nervous system diseases. |
A Royal[ty] Deal For Agenus
Lexington, Massachusetts-based Agenus Inc. will gross up to $115m under an agreement to sell the company's royalties for prophylactic shingles (HZ/su) and malaria (RTS, S) vaccines partnered with GlaxoSmithKline to Oberland Capital Management LLC. Oberland will receive all of Agenus's worldwide royalties from GSK for sales of HZ/su until $100m in debt plus interest under the royalty agreement have been repaid. Another $15m will be issued to Agenus upon US FDA approval of HZ/su if the agency gives its endorsement for the shingles vaccine by June 30, 2018.
The funding will support Agenus's development of immunotherapies for cancer and other diseases. Agenus bought 4-Antibody in 2014 to boost its immunotherapy pipeline, but the company and GlaxoSmithKline discontinued their combined immuno-oncology efforts after the failure of their MAGE-A3 cancer vaccine.