Biotech Sector Raises $23bn In Venture Capital In 2018
Executive Summary
While major biotech indices went south in 2018, VC enthusiasm for biotech remained bullish. Biotech companies raised a record $22.83bn in 2018.
For private biotech companies, 2018 was a stellar year. Across the globe, 536 companies raised some $22.83bn from 569 transactions. As in previous years, US-based biotechs took the lion’s share, raising a total of $15.66bn, but the emergence of China as a start-up powerhouse was confirmed as Chinese companies were able to raise $2.72bn and so begin to challenge Europe which raised a record $3.43bn.
Californian biotechs accounted for almost a third of total global VC financing raising $7.45bn while Massachusetts-based companies secured some $4.90bn. In Europe, UK-based biotechs swallowed up almost 40% of the VC money raised. Approximately 45% of the funds raised were put to work in companies with a cancer therapeutic focus, while CNS activities attracted just over 14% of the total take.
Nearly 40% of the biotech financings were in seed and series A rounds which raised a total of $6.34bn. Again, the US dominated with some 63.5% of the 170 series A rounds completed, including seven of the 10 largest rounds, which raised $100m or more.
Samumed LLC, a regenerative medicine company based in San Diego, topped the series A chart when it completed a $438m round in August, bringing the total equity raised to date to more than $650m at a pre-money valuation of $12bn. The company is using the money to develop its small-molecule platform that harnesses the innate restorative power of the Wnt pathway to reverse the course of several severe diseases. The company’s lead program, SM04554, is in a Phase II/III trial as a treatment of androgenetic alopecia, while it plans to conduct a Phase III trial of SM04690 as an osteoarthritis treatment in 2019.
Outside the US, the largest series A round was completed by the German biotech BioNTech AG. The Mainz-based company raised a total of $270m and diversified its shareholder base to include US investors in January 2018. Since then, the company has expanded its mRNA focus beyond cancer indications to include infectious diseases, underpinned first by the June 2018 partnership signed with the Sanofi Pasteur division of French pharma giant Sanofi, and then a flu vaccine deal with Pfizer Inc. and a ten-program collaboration with the University of Pennsylvania.
Two Chinese cancer-focused biotechs appear in the 2018 top 10 series A financings. Curon Biopharmaceutical, a Shanghai-based biotech, raised $150m in July 2018, while the Suzhou-based immuno-oncology play Alphamab Oncology completed a $100m fianncing in November 2018.