Analysts at Silicon Valley Bank have been crunching the numbers on biotech investing, and they have found that a group of busy corporate venture arms has fundamentally changed the landscape for startups and the entire field of early-state drug development--with some big implications for the current crop of industry upstarts.
Sofinnova Ventures has evolved rapidly over the past decade to suit the times, from a diversified early stage biotech and IT investor to focusing solely on later stage biotech. And LPs seem to think it is making all the right moves; it has closed a ninth fund at $500 million, the hard cap for the fund that was initially targeting $425 million.
With investors revved up about biotech's future, a string of funds have outlined plans to raise billions of dollars to back a new generation of life science companies. And New Science Ventures is joining the frenzy with a $100 million game plan of its own.
Versant Ventures is nearing the finish line in its quest to raise a fresh $300 million fund to finance a new wave of biotech and med tech companies. The group, which is based in Menlo Park, CA, filed papers with the SEC indicating that it has now raised all but a few million dollars for Versant Ventures V, its first new fund since the last big $500 million fund was opened for business in 2008.
The biotech is also planning to launch studies for SNC-102 in Tourette syndrome and post-traumatic stress syndrome. Accellient seeded Synchroneuron up to its $6 million Series A from Morningside.
Venture investing in the biotech sector hit the $1.1 billion mark in the first quarter of the year--a surprisingly strong showing for what has generally been a quiet season in the U.S. industry.
San Francisco biotech bankroller Foresite Capital has closed a $300 million second fund, setting out to invest in drugmakers with a clear path to market amid some renewed optimism in life sciences venture capital.
Anyone looking to start a biotech company should pay close attention to this list. Venture groups, entrepreneurs and increasingly Big Pharma have been concentrating their money and their attention in a few key places, only occasionally straying from the beaten path when funding a high-risk drug development effort.
With IPOs still booming, follow-on financings sizzling and venture capital rolling in at a steady pace, the biotech industry has been stocking up on billions of dollars in cash.
As biotech venture funding plods along at a middling pace, A-list investor OrbiMed has bagged $735 million for its 5th fund, cash earmarked for life sciences companies across all stages of development.