|
WSJ Pro Special Report: Health Care and Private Markets
|
|
|
|
|
|
As I write this, I am hunkered down in my home office practicing social distancing. In the past month, the rapid spread of the new coronavirus has upended stock markets, frozen credit and raised the specter of a global economic downturn.
How ironic that this crisis began to unfold when we were in the midst of pulling together our annual health care-themed issue of this newsletter and updating the annual Body Project data.
Health care-focused venture firms have continued to pump capital into startups that seek to harness the body’s own immune systems in the fight against specific diseases, namely cancer, WSJ Pro's Brian Gormley writes in this report’s lead story, “Venture Investors Rush Into Immunology and Blood Startups.”
We caught up in this report with some health-care investment veterans to get their perspectives on the challenges and opportunities they see in the sector, although their answers predated the rapid escalation of the coronavirus pandemic.
As events continue to unfold, our team will continue to deliver the insightful coverage and analysis you need to help navigate these uncertain times.
Now on to today's news...
|
|
|
|
Venture Investors Rush Into Immunology and Blood Startups
|
|
|
|
Venture capitalists seeking to revolutionize cancer treatment and testing helped propel biomedical venture-capital investment to new heights in 2019.
In an analysis of U.S. medical venture funding across 17 areas of the human body, the industry set records in both the blood and immune-system categories, largely because of interest in new ways of detecting cancer in the blood and harnessing immune cells’ tumor-fighting powers, reports WSJ Pro's Brian Gormley.
Immunology companies captured $1.56 billion through 65 venture rounds in 2019, both records, while developers of blood tests and blood-disease treatments secured $2.17 billion across 164 rounds, according to PitchBook Data Inc. The number of deals in blood is a new peak and the total funding is second only to the $2.78 billion wagered in 2017.
[Continues below...]
|
|
|
|
|
Conventionally, venture investment in the cardiovascular market has been driven by bets on medical devices such as heart valves and stents. But in recent years, the sector also has benefitted from the growing convergence of medical and digital technologies.
|
|
|
Take Element Science Inc., which in March gathered $145.6 million in Series C financing. Element Chief Executive Uday Kumar previously founded iRhythm Technologies Inc., a former venture-backed company that went public in 2016 and developed a patch that helps physicians detect and diagnose irregular heart rhythms, or arrhythmias.
|
|
|
|
|
Diseases such as Alzheimer’s and Parkinson’s have long enticed
venture capitalists because of the need for better treatments
for these conditions, and in 2019,
|
|
|
investors backed a variety of neurological drug developers. They included Arkuda Therapeutics Inc., which collected $44 million in Series A financing to pursue a treatment for a genetically defined group of patients with frontotemporal dementia, a disease stemming from a loss of neurons in the brain’s frontal or temporal lobes.
|
|
|
|
Biotech Companies Tap AI to Speed Path to Coronavirus Treatments
|
|
|
|
An image from the National Institutes of Health shows the novel coronavirus in yellow. PHOTO: ASSOCIATED PRESS
|
|
|
Companies racing to find treatments for the novel coronavirus, which has infected hundreds of thousands of people, are turning to artificial intelligence to speed up their drug-discovery efforts.
Health authorities have been searching for a drug to treat Covid-19 since shortly after the virus that causes the illness emerged in China late last year, report WSJ Pro's Jared Council and Brian Gormley. There are no approved treatments or vaccines, although an antiviral drug from Gilead Sciences Inc. began clinical tests in the U.S. in early March. Clinical trial enrollment is also under way in the Seattle area for a coronavirus vaccine developed by biotech company Moderna Inc.
|
|
|
|
Private Equity Ramps Up Bets on Biopharma
|
|
|
|
Private-equity investment in biopharmaceutical companies hit a record level in 2019. PHOTO: ELISE AMENDOLA/ASSOCIATED PRESS
|
|
|
Health care-focused private-equity firms bet big on biopharmaceutical deals in 2019, despite the regulatory scrutiny the sector has faced in recent years, WSJ Pro's Laura Cooper reports.
The amount of capital private-equity firms invested globally in biopharma deals rose by almost 150% to $40.7 billion of disclosed deal value last year, according to the Global Healthcare Private Equity and Corporate M&A Report 2020, published by consulting firm Bain & Co.
The number of deals made also increased—albeit more modestly—to 85 last year, from 79 in 2018, the report said. In total, the biopharma sector accounted for more than half of the $78.9 billion private-equity firms invested world-wide across all health-care deals last year, the report said.
|
|
|
Concord Health Partners Taps LP Knowledge to Shape Portfolio
|
|
|
|
Concord's staff watches Brian Gragnolati, previously chair of American Hospital Association, speak during an interview. PHOTO: Concord Health Partners
|
|
|
Concord Health Partners has the perfect resource to turn to when shaping the products and services of the startups the firm backs: its own investors.
The Summit, N.J.-based firm secured most of the capital it raised for its first institutional fund in late 2017 through a partnership with the American Hospital Association, a Chicago-based advocacy group composed largely of hospitals and health organizations, reports WSJ Pro's Isaac Taylor.
“I began thinking about putting together a new firm where health systems and health insurers could be the LPs in a fund,” said Concord Health Managing Partner James Olsen, who founded the firm in 2017 after a lengthy career in health-care banking. “And the fund itself could invest in health-care companies that have innovative solutions that address affordability, quality and access.”
|
|
|
MPM Capital Raises $100 Million Fund, Teams Up With Dana-Farber Institute
|
|
|
|
Dr. Laurie H. Glimcher, president and chief executive of Dana-Farber Cancer Institute, and Dr. Ansbert Gadicke, co-founder and managing director at MPM Capital. PHOTO: JUSTIN KNIGHT/DANA-FARBER CANCER INSTITUTE
|
|
|
Health-care investor MPM Capital has raised a $100 million venture-capital fund through a new collaboration with Boston’s Dana-Farber Cancer Institute aimed at promoting cancer research and new oncology-drug startups, Brian Gormley reports for WSJ Pro.
MPM’s partnership with a top cancer research and treatment center comes as biotechnology venture investors seek access to the most-promising academic discoveries and as medical institutes pursue new ways to fund research and propel their innovations into the market.
|
|
|
Health care has been one of the most popular sectors for private-equity investors in recent years, despite heavy regulation associated with the industry. Yet, proposed changes to health-care regulation could pose fresh challenges for investors in the sector. We asked a handful of veteran investors in the health-care sector to share their thoughts on lessons learned from the past and the challenges that lie ahead.
|
|
|
|
|
|
"A key lesson is the importance in provider-based businesses having a cost structure that is profitable at Medicare reimbursement rate levels and not reliant on higher commercial rates."—Jay Reynolds, Principal, Riverside Co.
|
|
|
|
|
|
|