Biotech VCs wager $1.1B in Q1, plus: top 5 rounds

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.

The MoneyTree Report, a production of PricewaterhouseCoopers and the National Venture Capital Association with data from Thomson Reuters, tracked 112 deals in the first three months of the year. Compared to a bullish fourth quarter, the numbers slid 23% on the dollar side and 21% in the number of deals.

Venture investing in biotech, though, tends to fluctuate quite a lot from quarter to quarter. Last year during Q1 biotechs attracted a meager $875 million for 96 deals, which also reflected a sharp drop from the fourth quarter. Comparing Q1 to Q1, the numbers jumped 26%.

Over the last few years venture investing in biotech has tended to fall between $4 billion and $4.5 billion a year. In 2013, total venture investing in biotech hit $4.53 billion. So at a minimum 2014 is now on track to a solid annual total. And it's early yet.

While the overall number of venture groups dwindled after the 2008 financial crisis, the remaining venture players like Third Rock have been attracting an enthusiastic group of institutional investors, particularly after biotech stocks became trendy last year and the IPO window flew open after being largely closed for four years. The NVCA reported a few days ago that a total of 59 U.S. venture funds attracted $8.9 billion in the first quarter, the best quarterly record the group has seen since 2007.

Biotech came in second--behind software--in terms of the total amount of venture cash invested by sector.

Here's a look at the NVCA's top 5 biotech deals of Q1:

-- Melinta Therapeutics raised $70 million. In the 10 months since Mary Szela took charge of New Haven, CT-based Melinta Therapeutics--the antibiotics developer once known as Rib-X--the CEO has built up an experienced team of R&D executives. Now she also has the money needed to wrap an ambitious late-stage program for their lead product while preparing to usher a new set of assets into the clinic. The money came from Vatera and some undisclosed investors. Story

-- Versartis raised $65 million in a Series E, then promptly turned around and raised another $126 million to fund the late-stage work on a long-acting recombinant human growth hormone designed to treat HGH deficiency. Advent, Aisling, Fidelity, New Leaf, Sofinnova and some undisclosed investors added to the round for the Redwood City, CA-based biotech. Report

-- Kolltan Pharmaceuticals is another New Haven, CT-based biotech that did well, raising $60 million for its cancer drug work shortly after launching its first Phase I study. The experienced team's monoclonal antibody is dubbed KTN3379. The drug blocks tyrosine kinase ErbB3 receptor found on solid tumors. And the biotech is angling to take its place among the growing number of combos in oncology R&D, looking for matches with HER2 blockers and EGF inhibitors. It now has the money to pay its way through Phase II. Elm Street, HBM, Osage and Purdue put up the money for this round. Report

-- This particular investment could spark some debate over why it's included as a venture round. Edison Pharmaceuticals recently signed a multibillion-biobuck deal with Dainippon Sumitomo built around their work on the mechanics of cellular energy and the consequences of a malfunction in energy metabolism. The upfront money is being used to help prep 10 new clinical drug candidates for trials. The Mountain View, CA-based biotech received a $10 million payment from Dainippon and $40 million in R&D support for its work on mitochondrial disease. Thomson Reuters reports that Edison raised $50 million from an undisclosed investor. In a follow-up query from FierceBiotech, the group noted that Edison had previously raised $20 million from Mitsui and that the $50 million equity investment from Dainippon therefore qualifies for the MoneyTree list. Release

-- San Diego-based Lumena Pharmaceuticals is another one of those biotechs shooting for a venture round/IPO combo. The biotech is focused on a lead drug for a rare liver disease and a second program for nonalcoholic steatohepatitis, which starts Phase II later this year. The round raised $45.5 million. A few days ago Lumena followed up with plans for a $75 million IPO, if the window remains open. The venture cash should get the biotech well through mid-stage studies. Alta, NEA, Pappas, Capital Management and RiverVest put up the cash. Story

Special Report: The top 15 cities for biotech venture funding