Record raise sees Immunocore square up to its peers

There is no disputing the fact that the $320m series A round completed today by Immunocore is a monster. It is bettered only by Moderna’s $450m raise in January, and is the largest private round ever for a European biotech, smashing UK biotech’s previous biggest venture financings (see tables below).

Even more impressive than this, however, might be that the deal values Immunocore at close to $1bn, as the UK group confirmed today. Still, this valuation means that Immunocore is still cheaper than listed groups working on engineered T-cell receptors, including its sister company Adaptimmune, which recently floated on Nasdaq.

The promise lies in Immunocore’s specific take on the cell therapy approach, using a soluble form of the T-cell receptor (TCR) that acts as a type of bispecific agent: one part binds the tumour antigen, while the other hits and activates T cells (Big pharma marks Immunocore as a cell therapy player to watch, June 29, 2014).

The group already counts Lilly, GlaxoSmithKline, Roche and AstraZeneca as discovery partners, and with such endorsement, if the technology pans out, its current $1bn valuation will look cheap. Juno Therapeutics, whose lead projects are CAR-Ts, is valued at $4.7bn, while Adaptimmune, which works on typical engineered TCRs, is worth $1.1bn.

It is still early days, the $320m raise being a series A round, but already Immunocore has managed almost to set the record for a biotech VC round: only Moderna tops it in the post-credit crunch period that encompasses the current biotech bull run.

Followers of UK biotech will also be thrilled that Immunocore has basically rewritten the rulebook for the local sector, which has historically been plagued by an inability to raise sufficient cash.

Excluding Immunocore and Adaptimmune, which are both derived from the Avidex business bought and spun out by Medigene, you have to go back five years to the next biggest raise by a private UK biotech. That was Archimedes Pharma, which raised $100m and ended up being acquired by Kyowa Hakko Kirin last year for £230m ($360m).

It would be premature to suggest that Immunocore signals a turnaround for UK biotech, but the presence of the UK fund manager Neil Woodford as a backer is also relevant. Woodford Investment Management was one of the new investors in Immunocore, and Mr Woodford has planned to target UK biotech via a recently created £800m fund, Woodford Patient Capital Trust.

Other new Immunocore backers include Malin Corporation, which put in $80m, Lilly and RTW Investments. There is no indication as to whether Medigene participated to any extent; if it did not it will have seen its previous 3% stake in the business diluted down to about 2%, with a value of around $20m.

Until the current round 97% of Immunocore was held by owners and affiliates of Adaptimmune, including Nicholas Cross and George Robinson – directors of both businesses. Immunocore, meanwhile, owned 7.6% of Adaptimmune before the sister company’s float.

This complex series of cross-holdings means that the backers of either company have an indirect interest in the other. This sets up various hypothetical business development scenarios, though exits for Immunocore’s private investors can at present only be guessed at.