The $120m raised by Juno Therapeutics this week in a series A round deserved to attract much attention, and not just because of the huge sum raised (Juno exploits immuno-oncology frenzy to raise huge series A, December 4, 2013). Private, venture-backed life science companies are capable of raising sizeable pots of cash, but this is rarely achieved by those operating at the very early stages of drug development.
An analysis of the 15 biggest venture capital rounds of the past decade shows that Juno’s round ranks as the sixth largest, according to EvaluatePharma. Few others in the list can claim to be purely focused on early drug discovery – Symphogen and Moderna also stand out in this regard. Topping the table is Jazz Pharmaceuticals, with its $250m series B back in 2004 (see table).
|Biggest venture rounds of the past decade|
|Rank||Financing date||Financing round||Company||Investment ($m)|
|1||Mar 2004||Series B||Jazz Pharmaceuticals||250|
|2||Nov 2012||Series Undisclosed||Intarcia Therapeutics||160|
|3||May 2013||Series F||Intrexon||150|
|4||May 2009||Series A||Clovis Oncology||146|
|5||Jan 2011||Series E||Symphogen||132*|
|6||Dec 2013||Series A||Juno Therapeutics||120|
|7||Nov 2013||Series B||Moderna Therapeutics||110|
|8||Jul 2010||Series F||Pacific Biosciences||109|
|9||Apr 2013||Series E||Revance Therapeutics||104|
|10||Jun 2011||Series B||Tesaro||101|
|11||May 2011||Series E||Intrexon||100|
|12||Nov 2006||Series C||Kalypsys||100|
|13||Dec 2006||Series Undisclosed||NephroGenex||100|
|14||Jul 2008||Series E||Pacific Biosciences||100|
|15||Apr 2011||Series A||Ascletis||100|
|*Topped up two years later to $185m|
This analysis focuses on venture funding for companies operating at the high risk and experimental end of drug development; it has excluded growth capital investments directed at more mature businesses by private equity firms, which tend to be larger.
Jazz Pharmaceuticals’ table-topping $250m series B arguably pushes the boundaries, as it was supplied by a mixture of the traditional VCs that had seed-funded the company the previous year and new investors, like Kohlberg Kravis Roberts, more typically associated with growth capital. The company’s aim was to build a portfolio of products that included those already on the market, as well as in development.
Still, $250m is a remarkable sum to raise for a start-up that had been founded the previous year.
Other companies that feature in this analysis have business models very different from Juno's; Intrexon and Pacific Biosciences, which crop up twice, are involved in life science tools rather than drugs, and both are now public.
Drug development companies unsurprisingly tend to be at a later R&D stage. Intarcia for example was pledged a huge $210m last year – $160m in stock and the remainder in debt – to fund the pivotal programme for ITCA 650, an implantable pump that slowly releases exanatide for type 2 diabetes. Phase III enrolment started in March; four trials recruiting at least 4,000 patients will be run, with results expected later in 2014 (VC dollars rain onto Intarcia on diabetes implant hopes, November 19, 2012).
And Revance, which raised funds to run phase III trials of its botulinum toxin products, managed to grow a $33m series E into a $104m round through the conversion of $71m of debt. Like Intarcia, its shareholder roll call includes investors more associated with later-stage companies.
As such, Clovis arguably tops the list as an example of a drug developer raising venture funds solely for early R&D. However, even in this case the company was set up with the cash to buy a pipeline; the huge sum reflects the strong track record of its management rather than hopes pinned to a particular project. It is also now public.
All of which makes the huge amount of venture capital raised by the antibody specialist Symphogen even more remarkable, particularly when considering that this is Europe’s sole representative on the list. The company this year topped up the series E with further cash from three investors, taking the round to $185m. Were it not for the two-year gap, this round would have made the number two position.
Another pure-play, early-stage drug developer that stands out in the analysis is Moderna Therapeutics; few details were released about the recent funding round, and little is known about the group's technology. But the company, which is working on novel messenger RNA therapeutics, has been nothing if not successful on the fund-raising front, snagging $240m from AstraZeneca and a $25m grant from DARPA this year.
It is interesting to note that none of the companies in this analysis has been taken over. While some were on a clear path to the stock market, acquisition must have been the exit in mind for many of the investors putting up these huge sums of money.
There is time for this to happen as all of the companies are still around. And considering that Juno is operating in cancer immunology, perhaps the hottest area of research right now, evidence of clinical success could secure this outcome.