VC UPDATE: Polaris closes $450m fund in biotech-friendly US market
This article was originally published in Scrip
Polaris Partners closed its seventh venture capital fund, raising $450m to finance private technology and health care companies in an environment that's increasingly friendly to VC investments generally and biotechnology investments specifically.
The National Venture Capital Association (NVCA) reported in October that across the biotech, high-tech, finance and retail industries VC firms raised $23.8bn for new funds through the third quarter of 2014. That was more than the venture capital industry raised in any 12-month period dating back to 2009 and this year is on track to beat the $25.1bn total in 2008.
How is that money and cash from prior fundraising years being invested in the life science industry in 2014? About $5.9bn in venture capital was invested in biotech and medical device companies during third quarter, according to the MoneyTree report compiled by NVCA and PricewaterhouseCoopers (PwC) with data from Thomson Reuters.
"For the first nine months of the year, investment in the life sciences has almost touched $6bn, which is close to the $6.7bn invested for the full year in 2013," PwC life sciences partner Greg Vlahos said in a recent third quarter review of biotech and medical device venture capital. "Overall 2014 is expected to be one of the strongest years for life sciences investments, especially for biotech."
Third quarter VC investment in biotech companies jumped 7% year-over-year to $1.05bn (although the number of deals slipped by 13% to 110), including $601m for early-stage opportunities. The nearly $4bn in biotech venture capital raised through September puts the sector well on its way to exceeding the $4.7bn raised in 2013 (scripintelligence.com, 26 October 2014). Biotech VC investment has been helped by returns from recent initial public offerings and acquisitions.
Polaris, despite its focus on both health care and technology, has been an active supporter of biotech companies. The VC firm recently participated in a $53m Series B round for Syros Pharmaceuticals, a $30m Series B round for Visterra, and a $20m Series A for Scholar Rock (scripintelligence.com, 31 October, 2 October and 15 September 2014).
Polaris joins the ranks of other biotech VC investors that raised or are about to close new funds in 2014, including Versant Ventures, which will get up to $25m from Bayer HealthCare for its new $300m-plus fund (scripintelligence.com, 6 November 2014).
Biotech companies that recently closed venture capital and other private financing deals include Intellia Therapeutics, Renova Therapeutics and N30 Pharmaceuticals.
The newly formed company will develop therapeutic products that use CRISPR-Cas9 technology for gene editing and repair in a wide variety of diseases and indications.
Intellia raised $15m in a Series A venture capital round led by Atlas Venture and Novartis.
San Diego, California
Developing gene therapies for congestive heart failure (CHF) and other chronic diseases, Renova is running a 56-patient, Phase I/II clinical trial for its lead CHF gene therapy candidate under a public-private partnership with the National Institutes of Health. The company's preclinical pipeline includes a second-generation CHF therapy and a type 2 diabetes product candidate.
Five-year-old Renova raised a $7.52m Series C round from high-net-worth individuals. The company also made a new appointment to its board of directors: Daniel Bradbury, who was CEO of Amylin Pharmaceuticals when it was acquired by Bristol-Myers Squibb for $7bn in 2012. Mr Bradbury currently is a managing member of the life sciences consulting and investment firm BioBrit.
N30 is developing the oral drug N91115, an S-nitrosoglutathione reductase (GSNOR) inhibitor, to treat cystic fibrosis (CF). After completing a Phase I clinical trial in healthy volunteers, the company is running two Phase I trials with CF patients who have a genetic mutation that's present in about 90% of people with the lung disease. The Cystic Fibrosis Foundation previously provided funding for N9115 (scripintelligence.com, 21 November 2014).
New investors Wellington Management, RA Capital Management, Jennison Associates, Rock Springs Capital Management and Sabby Management joined existing investor Deerfield Management in a $30m mezzanine financing round.