Covid or not, venture financing breaks records

Private biotechs attracted more venture cash in 2020 than in any other year of the current cycle.

Venture financing

A year that started with cautious optimism over biotech venture financing has wound up breaking records. Private biotechs ended 2020 having raised just under $20bn, eclipsing even the boom year of 2018, the latest EvaluatePharma data have revealed.

Back in the first quarter of 2020, as the coronavirus pandemic was starting to spread, the hope was that biotech would prove sufficiently resilient to allow VC financing to fall only to 2017 levels, making 2018 an outlier. In fact the full-year totals seem to have blown even the rosiest expectations out of the water.

The numbers are so stunning that it is difficult to find negative trends. If there is one it is that 2020's absolute number of VC rounds was around the 450 mark, despite the record-breaking total cash raised; this is lower than 2017’s 528, and even than the 492 rounds in 2014, when only a total $7.2bn was raised.

The clear trend is towards ever bigger venture rounds. Indeed, the average financing per round last year came in at nearly $45m, almost $10m higher than the average in 2019.

This rising average was driven by a few truly monstrous individual company raises. The secretive cell therapy player Lyell Immunophrma topped the first quarter with a $493m raise, while June saw Sana Biotechnology close an astounding $700m series A round; both companies are linked to Hans Bishop, the former chief executive of Juno.

It was Sana that pushed the second-quarter VC funding total above $5bn – the first time that quarterly total had been breached in the current cycle. And it was only because of Sana that the third and fourth quarters looked like a retrenchment; in reality, of course, each period brought in nearly $5bn of private cash.

Annual biopharma venture investments 
  Investment ($bn)  Financing count  Avg per financing ($m)  No of rounds ≥$50m  No of rounds ≥$100m 
2020 19.99 448 44.63 154 59
2019 15.12 435 34.76 119 38
2018 17.89 481 39.06 130 38
2017 13.21 528 27.40 76 19
2016 10.44 493 22.51 52 15
Source: EvaluatePharma

While Covid-19 ravaged other sectors, the fact that biopharma is seen as the solution to the global crisis probably accounts for the huge funding inflow. This analysis includes only companies developing human therapeutics, and excludes medtech, diagnostics and digital health, which have also thrived in the pandemic.

Looking specifically at the fourth quarter, Lianbio’s $310m might seem unimpressive compared with the likes of Sana, but in reality this is still a great series A round, putting the cardio/oncology group’s raise in fourth position over the whole of 2020.

It will not go unnoticed that Lianbio is one of three Chinese biotechs in the fourth quarter’s private top five. Only one of these, the speciality group Nuance, is not a cancer player, and Carsgen is a Car-T company that presented impressive anti-BCMA data at the recent Ash meeting.

It seems likely that once all the numbers are in – there are typically a few small rounds that are not announced until some time after closing – the 2020 VC total will exceed $20bn. What does 2021 do for an encore?

2020's biggest biotech venture rounds
Company Country Investment ($m) Financing round
The top five of Q4 2020...
Lianbio China 310.0 Series A
Recursion Pharmaceuticals US 245.9 Series D
Ambrx US 200.0 Undisclosed
Carsgen Therapeutics China 186.0 Series C
Nuance Biotech China 181.0 Series D
...and the best of 2020 overall
Sana Biotechnology US 700.0 Series A
Lyell Immunopharma US 493.0 Undisclosed
Everest Medicines US 310.0 Series C
Lianbio China 310.0 Series A
Mabwell China 279.0 Series A
Source: EvaluatePharma

Related Topics

Share This Article