Celladon, Aragon top table for biggest VC rounds of Q1

Analysis

Total venture capital investments might have had a slow start to the year, even for a traditionally slow period for fundraisings, but a couple of notable rounds did take place in the first three months of 2012 (Slow Q1 for VC funding points to another challenging year ahead, May 3, 2012).

Celladon managed to raise the biggest round of the first quarter with a $43m raise heavily backed by corporate venture funds, a round that has since been topped up with another $10m. A look at the biggest rounds of the quarter and last year reveals unsurprisingly that US companies continue to dominate when it comes to big sums of money (see tables). There is some way to go, however, before last year’s record round - $143m from Denmark’s Symphogen – is surpassed.

Biggest VC rounds of Q1
Rank Company Financing Round Investment ($m) Country
1 Celladon Series D* 43.0 US
2 Aragon Pharmaceuticals Series C 42.0 US
3 Prosensa Series C* 31.2 The Netherlands
4 C3 Jian Series Undisclosed 30.0 US
5 Elevation Pharmaceuticals Series B 30.0 US
6 Anaeropharma Science Series Undisclosed 28.0 Japan
7 Tarsa Therapeutics Series B 28.0 US
8 BIND Biosciences Series D 25.5 US
9 Collegium Pharmaceutical Series B 22.5 US
10 Promethera Biosciences Series B 22.5 Belgium
*Implied Series

Celladon’s fourth raise in February was essentially a series D, although the company did not use this label. Last week another $10m was added to the coffers with the addition of two more investors, MPM Capital and LSP Life Sciences Partners. They joined Pfizer Venture Investments, Lundbeckfond Ventures, Novartis Venture Funds, H&Q Healthcare/Life Sciences Investors and GBS Venture Partners; Johnson & Johnson’s Development Corporation had participated in previous rounds.

The company will use the cash to fund further trials of Mydicar for the treatment of heart failure, an enzyme replacement therapy that won FDA fast track status late last year. Promising phase II data emerged last year showing the drug, compared to placebo, significantly reduced the risk of major cardiovascular events and shortened the duration of hospitalisations, while appearing to stabilise heart failure symptoms.

However the trial was very small, only recruiting 46 patients and the company needed backing to run more rigorous studies. With late-stage cardiovascular trials requiring substantial investment, it is perhaps not surprising to see on Celladon's roll call so many corporate venture funds that might have deeper pockets and a longer term view, rather than traditional funds.

Conversely Aragon managed to raise an equally healthy Series C, $42m, from more traditional venture investors. The company’s focus on oncology – it is working on therapies that target hormone driven cancers – no doubt helped form a traditional venture capital syndicate – Topspin, Aisling Capital and OrbiMed Advisors are major investors.

With cancer remaining a key interest of many larger drug companies the chances of a quick and clean exit are probably higher with this sort of proposition. Prosensa, a developer of RNA-modulating therapies for rare diseases, is a similar case, with orphan indications also attracting the keen attention of bigger players. The Dutch company raised its third round of financing in January to fund further work on its pipeline of products targeted mainly at Duchenne muscular dystrophy.

2011 result

The €100m raised by Symphogen last year, worth $143m at the time, was by far the largest amount of capital committed to a private developer of human therapeutics (EP Vantage Interview - Symphogen awaits proof of concept as funding secured, January 26, 2011)

An antibody specialist focusing on oncology, Symphogen is working on recombinant polyclonal antibodies, compositions of antibodies that bind to different sites on the same antigen in an attempt to boost potency. Last month the company received the second of two tranches of financing committed by its investors – Novo A/S and Essex Woodlands together contributed 70% of the €100m – after meeting key clinical milestones with its lead clinical oncology product, Sym004. In August last year the drug, composed of two anti-EGFR mAbs targeting different non-overlapping epitopes, entered a phase II trial in advanced head and neck cancer patients who had failed treatment with existing anti-EGFR antibodies. Results have yet to be announced.

Other notable big rounds of last year included Ascletis’ huge Series A. Describing itself as a US-China specialty life sciences venture focused on cancer and infectious diseases, the company announced its existence alongside the financing, led by Hangzhou Binjiang Investment Holding and including private entrepreneurs from China and other countries including the US. The company has operations in Hangzhou, China and the Research Triangle Park area of North Carolina.

With six of the top ten round of last year hitting the $100m mark, or thereabouts, and the first quarter of 2012 failing to generate a single raising of more than $50m, there is clearly some catching up to do. A couple of larger rounds have emerged so far in the second quarter – Alder Biopharmaceuticals raised $38m in a Series D while Eleven Biotherapeutics this weeks expanded its Series A by $20m, to reach a substantial $45m committed so far.

Both are US companies, revealing along with the top ten tables the dominance of US companies. It has long been the case that greater pools of capital are available to drug developers operating in America. While companies like Symphogen and Circassia demonstrate that it is possible for European firms to raise big rounds, these continue to be the exception, rather than the rule.

Biggest VC rounds of 2011
Rank Company Financing Round Investment ($m) Country
1 Symphogen Series F* 142.7 Denmark
2 TESARO Series B 101.0 US
3 Intrexon Series E 100.0 US
4 Biocartis Series C 100.0 Switzerland
5 Ascletis Series A 100.0 US
6 Circassia Series D* 98.0 UK
7 Portola Pharmaceuticals Series E* 89.0 US
8 Agios Pharmaceuticals Series C 78.0 US
9 Merrimack Pharmaceuticals Series G 77.0 US
10 Rempex Pharmaceuticals Series B 67.5 US
*Implied series

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