KQ Labs’ Post

Great summary of Q1 2024 venture capital financing in the biotech sector. Some large rounds were raised, but fewer in number compared to other quarters. In addition, these rounds tended to go to experienced management teams and later stage assets. #MLLifeSci, #VCfinancings, #wearemorganlewis

#AI, Samsung invests W72b in US fund for AI-driven biotech Samsung C&T and its biotech subsidiaries Samsung Biologics and Samsung Bioepis, announced last week they would invest 72 billion won ($52 million) in a US fund focused on startups using AI-based new power drug development platform technologies.   The investment will be made through the Samsung Life Science fund, created by the Samsung affiliates and managed by Samsung Venture Investment.   The money will be invested in venture capital firm Flagship Pioneering's eighth fund, which has so far raised a total of $2.6 billion.   Since its establishment in 2000, Flagship Pioneering has become one of the top three global venture capital firms specializing in biotechnology and life sciences, currently managing operating assets of approximately $14 billion.   The venture capital firm is known for founding and nurturing biotech startups with internal research organizations, having initiated over 100 companies, including Moderna, with some 30 of them going public.   According to industry reports, Flagship Pioneering already has substantial investments in AI, including Generate Biomedicines, which completed the largest funding round for a biotech company last year.   "The successful raising of this fund demonstrates market confidence in Flagship's fund management capabilities even in challenging investment environment," Flagship Pioneering's Asia Pacific Chair Andre Andonian was quoted as saying. "Our eighth fund will be dedicated to launching and nurturing new technology companies, which is a core strength of Flagship."   Samsung plans to obtain information on innovative life science technology companies identified by the VC firm and will evaluate potential additional investments in these companies. The initiative aims to serve as a crucial gateway for discovering new business opportunities in the bio and health care sector. In January, Samsung C&T signed a strategic cooperation business agreement with Flagship Pioneering through investments with its bio business subsidiaries, to strengthen future collaboration.   "Samsung C&T is aiming to secure future growth engines by focusing on eco-friendly energy and bio businesses," Kim Jae-woo, vice president of Samsung C&T's Life Science business, said in a press release.   "The investment in Flagship Pioneering's eighth fund is part of our efforts to discover next-generation technologies in the bio sector. We expect to expand investment opportunities in new Samsung bio ventures by discovering innovative technologies that surpass current diagnostic and treatment methods and future technologies that could transform the world." Kim added.   Meanwhile, Flagship Pioneering is expected to raise additional funds for its eighth fund later this year, aiming to reach a target of $3 billion for the investment vehicle, according to industry reports. #AI, #RB

If you’re a biotech start-up looking for funds in 2024, either you’re lucky enough to raise a nine-figure venture round, or you’re scrounging for what’s left over. In the first quarter of this year, biotechnology and pharmaceutical companies collectively raised $5.9 billion across 209 rounds, according to the latest Venture Monitor report from PitchBook and the National Venture Capital Association (NVCA). The dollar amount is an increase from the 2023 quarterly average, but it’s spread across fewer deals. The total deal count is the lowest since the third quarter of 2018, during which PitchBook recorded 202 venture rounds. Before that, only 2016 saw so few deals. The dip is especially low among early-stage deals. Industry watchers say investors are still risk averse and, consequently, prioritizing investment in companies whose drug candidates are farther along in development. “I think the bar is still high,” says Katie Walsh McCarthy, chief innovation officer at the Halloran Consulting Group, Inc. “Investors have really reestablished their expectations. They do want to ensure there’s a reasonable amount of risk.” Those start-ups that have managed to buck the trend and raise “mega-rounds”—$100 million or more—have a few things in common. For one, investors are still likely to back experienced management teams. Investors are also more inclined to fund clinically validated science—that is, drug candidates that have been tested in humans. But Carolina Alarco, founder and principal of the consulting firm Bio Strategy Advisors, LLC and an angel investor, worries that this dynamic creates a secondary problem: that biotech may be “losing its edge” by deprioritizing newer programs. “Experienced CEOs and founders normally gravitate toward proven technologies and platforms to have the most likelihood of success,” Alarco says. “Young entrepreneurs and scientists, they have the true innovation. They have the real treatments that are going to come out in 10 or 20 years. I think we’re doing a disservice to science by not opening up some funding to these highly innovative approaches.” More detail in my latest for C&EN: https://lnkd.in/emcUD7aW

🌱 Early-Stage Science Investment: A Unique Opportunity in Biotech VC 🌱 With major VCs focused on large, later-stage funds, smaller VCs are seizing an exciting niche—investing in early-stage science. These focused funds offer more than capital; they bring hands-on support and guidance to high-risk, high-reward innovations that big funds often overlook. For biotech founders, this trend means access to engaged investors committed to their journey from lab to market. For investors, it’s a chance to back transformative ideas early and capture value from the start. 🔍 Could this shift redefine biotech funding and drive more breakthroughs?

🌐 Navigating the Biopharma Landscape: Insights on VC Trends and Future Prospects 🌐 🚀 Insights on VC and Biopharma 🚀 The biopharma sector is at a critical juncture, reflecting broader economic shifts and specific industry challenges. According to recent data from Pitchbook and STAT, life science venture capital (VC) firms are on track for a record-low year of fundraising in 2024. Here’s a deep dive into the numbers and what it means for our industry: 📉 Fundraising Decline: In the first half of 2024, life science VCs raised just 15 pools of capital, a significant drop from the 53 funds last year and 85 funds in 2022. This downturn will stifle the financial support available for startups in the coming years. 🔮 Post-Covid Impact: Many VC firms are grappling with past overvaluations and investment overindulgence. The stock market (Biopharma Stocks specifically) remains far from the heights seen in previous years. 📊 STAT's Biotech VC Rankings: STAT’s fifth annual report provides a comprehensive view of how these investors are performing. This year, Flagship Pioneering leads, having raised a notable $2.6 billion for a flagship fund and $1 billion in additional capital. ⚖️ Investment Shifts: Due to a need to rebalance after heavy investments during 2020 and 2021, pension funds and sovereign wealth funds are allocating less to new VC funds. 🎲 M&A Activity: Despite these challenges, there are positive signs. Biotech mergers and acquisitions have picked up, with firms like venBio successfully raising $528 million in July 2024, partially due to successful M&A outcomes involving portfolio companies like RayzeBio, Vividion Therapeutics, Inc., and Checkmate Pharmaceuticals. 📈 Milestone Payments: High milestone payments are a critical part of M&A deals. In 2023, the median upfront payment was $305 million, with an additional $500 million contingent on R&D milestones, highlighting the importance of strategic achievements. 🤖 AI and Data Science Integration: Flagship Pioneering’s success also underscores the growing importance of #AI in biotech. Investors are keen on VC firms that integrate AI and data sciences into their operations, as this new paradigm reshapes market strategies. 🧑⚖️ Regulatory Considerations: Navigating FDA approvals and other regulatory hurdles remains critical. These milestones directly impact the payout structures in M&A deals and the overall health of the investment landscape. The biopharma sector is indeed in flux, but challenges often bring opportunities. As professionals, keeping an eye on VC trends, regulatory shifts, and technological advancements is paramount. We can use this understanding to boost professional growth and make smart investments. What are your thoughts on the current state of life science venture capital? How is your organization adapting to these shifts? Let’s discuss! #Biopharma #VentureCapital #LifeSciences #BioTech #AIinBiotech #InvestmentTrends #BiotechMergers #Innovation

Thrilled to debut this #biotech venture capital funding database Gwendolyn Wu, Ned Pagliarulo, Julia Himmel and I have worked on for months. Inside you’ll find a snapshot of activity revealing important patterns of #startup investments. We’ll be updating regularly. We’ve focused, for now, on 23 VC firms highly active in creating biotech startups, and are tracking trends in funding and investment focus since 1/1/2022. We’ll add more with time. Scroll down for the rationale behind the methodology and to check the trend charts and other interactive features/filters you can use. And reach out with any questions, additional information, or data we’ve missed. #venturecapital #vc #biotechnology #pharmaceuticals #drugdiscovery

Life sciences and biotech startups in the U.K. raked in 41% of the funding invested in the sector in Europe in 2023, per data from the U.K. Bioindustry Association (BIA) reported by Lab News. U.K.-based startups raised £1.8B ($2.2B) in equity funding, down 9% compared to the previous year. While funding has dipped slightly, investors remain bullish about the sector as it has shown remarkable resilience and continues to outperform the stock market, per BIA's MD Steve Bates. The association claims that U.K. biotechs have witnessed a 350% surge in stock market performance compared to pre-pandemic levels. 40% of U.K. biotech VC deals saw participation from foreign investors, most of which belonged to the U.S. French VC firm Sofinnova was the most active investor in the sector.

Venture mega-rounds are on the rise in biotechnology as the outlook for the industry brightens. Sixty-eight U.S. and European biotech startups raised venture financings of $100 million or more this year through Aug. 31, putting this year on track to at least approach the 106 mega-rounds closed in 2021, the highest number on record, according to Silicon Valley Bank. Venture capitalists are increasingly confident that biotech is stabilizing after two years in which valuations reset lower from their 2021 highs. Mega-rounds also reflect a flight to quality, as investors crowd around what they view as the strongest companies, some observers said. “If there is a migration to quality, I think it de-risks the industry,” said Dr. James H., managing partner of biotech investor Sofinnova Investments . “As an asset class, we should see better performance.” Article by Brian Gormley: https://lnkd.in/egPmqzab

Biotech startups are built on venture capital. Track funding rounds here. Drug development is an expensive, risky endeavor. Biotechnology companies just starting out are many years away from seeing profits, if ever. So more often than not, a startup’s success turning science into medicines can come down to how much money it raises. That’s where venture capitalists step in, investing many millions of dollars for stakes in newly formed companies. Tracking that investment can reveal important patterns, showing how different drug types or diseases rise or fall out of favor with investors. BioPharma Dive built this database to help make that larger picture clear. We’ve focused on a group of 23 venture capital firms that are highly active in creating new drug developers. In the database below, we’ve collected funding rounds involving those firms, a ledger of investment that we’ll update regularly. https://lnkd.in/guUrUTAy

Investment - breaking news for Biotech Arch raises another $3B biotech fund in pursuit of ‘coolest’ new science Even in a selective investment climate, the firm is “in the ‘taking lots of risk’ mode,” according to co-founder Robert Nelsen. ARCH Venture Partners, a prominent creator of biotechnology startups, has raised more than $3 billion for its 13th fund, the firm announced Thursday.  The fundraise comes only two years after Arch secured a similar-sized haul that, at the time, was its largest to date. As it has in the past, the 38-year-old firm intends to use that cash to bet on cutting-edge science it believes can change healthcare. Arch has been a big proponent of the use of high-powered computing tools in drug discovery, for instance, and in a statement, co-founder and managing director Robert Nelsen noted how its team believes artificial intelligence can help enable “a more preventive, curative and equitable healthcare system.” Arch, though, has remained one of the sector’s most active life sciences investors throughout the tumult, often participating in some of the largest private funding rounds. Data from HSBC Innovation Banking shows that the firm made the second-most initial seed or Series A investments, and the most overall investments, of any biotech investor last year. It’s been similarly active in 2024, during which it’s already backed more than a dozen drug startups, according to BioPharma Dive data. https://lnkd.in/gC5iNfuZ