VC funding – Europe keeps up the pace while US slows

Last week’s $51m series B round for oncology company Aprea was the largest life sciences fundraising in Sweden in the last decade – but it is only the fourth-biggest in Europe this quarter.

Recent funding trends appear to be good news for European companies, who have long been the poor cousins to their counterparts across the Atlantic. While there are still fewer fundraisings in Europe, the average amount raised is now greater than the corresponding value for US companies (see tables below).

On a less positive note, the US investment climate seems gloomier than this time last year. Although there are still a few weeks left of Q1, both the number of rounds and amount raised look unlikely to meet the tallies seen in 2015.

EU versus US companies’ fundraisings in Q1 2015 and Q1 2016*
Total Sum ($m) Average ($m) Largest
Q1 2015 US 84  2,142.4  25.5 Moderna Therapeutics, $450m series D
EU  15  218.5  14.6 Innovent Biologics, $100m series C
Q1 2016 US  35  1,014.1  29.0 C4 Therapeutics, $73m series A
EU  12  388.0  32.3 Mission Therapeutics, $86.4m
series C
*As of March 10 2016

And also worryingly, the 2016 figures suggest that last year’s trend towards fewer, bigger rounds is continuing – meaning early-stage companies or those in unloved sectors might find it hard to get funding.

So far there has been nothing even close to Moderna’s mammoth $450m series D; no company has broken the $100m threshold yet this year. The largest round went to the UK’s Mission Therapeutics, whose deubiquitylating enzymes (DUB) platform could be used to treat cancer and other unmet needs such as Parkinson’s disease. Its candidates have yet to make it into clinical trials.

Top-five EU companies’ fundraisings, January 1-March 10 2016
Company Amount ($m) Sector Country Round
Mission Therapeutics  86.4 Oncology UK Series C
Cardiorentis  60.1 Cardiovascular Switzerland Series B
Autolus  56.7 Oncology UK Series B
Aprea  51.0 Oncology Sweden Series B
NovImmune  29.8 Inflammatory diseases, oncology Switzerland Undisclosed

Not too far behind was US-based C4 Therapeutics, which is developing drugs that destroy disease-causing proteins by harnessing the cell’s ubiquitin/proteasome system, and could treat a broad range of disorders according to the company.

Like Mission, C4 is still at the preclinical stage and it is unclear which diseases it is looking at first, but cancer seems likely to be high on the agenda – C4 already has a strategic partnership with Roche that could be worth over $750m.

Top-five US companies’ fundraisings, January 1-March 10 2016
Company Amount ($m) Sector Round
C4 Therapeutics  73.0 Various Series A
NextCure  67.0 Oncology Series A
Millendo Therapeutics  62.0 Endocrine disorders Series B
Adicet Bio  51.0 Oncology Series A
Armo Biosciences  50.0 Oncology Series C

Not surprisingly, oncology dominated the top venture rounds in Q1 2016 in both the US and Europe, showing that cash is not hard to come by for companies in a hot sector. And it does not get much hotter than CAR-T, the focus for UK-based Autolus, or the other branches of immuno-oncology, where NextCure, Adicet Bio and Armo Biosciences are active.

However, those in other areas were less lucky. The sole cardiovascular representative, Cardiorentis, is targeting the growing problem of heart failure and is at a later stage than many of the cancer drug developers – the Swiss company is expecting to file its lead candidate ularitide in the US and EU in the second half of this year.

This implies that those in less trendy sectors face a higher burden of proof before they can reel in investors.

All of this points to a growing divide between the haves and have-nots of pharma and biotech, suggesting that 2016 will see a continuation of last year’s VC themes. The lucky few will continue to attract big bucks – but others might end up fighting over the scraps.

To contact the writers of this story email Madeleine Armstrong or Edwin Elmhirst in London at news@epvantage.comor follow @medtech_ma or @EPVantage on Twitter

Share This Article