Good day. Health-care venture capitalists in 2020 raised $16.8 billion to invest in startups, dwarfing the previous record of $10.7 billion set the previous year, according to Silicon Valley Bank.

A soaring market for health-care initial public offerings and giant acquisitions of medical startups have stoked interest in life sciences venture funds, according to an SVB report, which said 2020 was the fourth straight year that health-care venture fundraising reached a new record.

Last year, for example, medical investor Longitude Capital secured $585 million for its fourth fund, topping the $525 million raised for its third pool in 2016.

The growth stems mostly from established firms, such as Longitude, raising larger vehicles. The number of life sciences-only funds raised in 2020 and 2019 was the same, 28 each, according to SVB. 

With institutional investors clamoring for health-care funds, you might expect that a growing number of new life sciences venture firms would be popping up. Some medical investors are leaving their jobs to start new ventures, SVB Managing Director Jonathan Norris said.

But many have incentive to stay put because their firms are thriving, he added. 

“When you have good times like this, with lots of fundraisings and great exits, it’s hard to move,” Mr. Norris said.

And now on to the news...

Gene-therapy startup. Lexeo Therapeutics Inc., a startup led by experts in genetic medicine and rare diseases, has raised $85 million in venture capital to develop gene therapies for a range of diseases. 

• Gene therapy typically involves using a functional gene to offset the effects of a faulty one. Pharmaceutical companies increasingly are betting on its potential to cure diseases that have few or no good treatments.
   
• Lexeo’s founder, Dr. Ronald Crystal, is chairman of the department of genetic medicine at Weill Cornell Medicine. Rare-disease experts from drugmakers Pfizer Inc. and Amicus Therapeutics Inc. have joined Lexeo’s management.
   
• Lexeo is developing gene therapies for patients with diseases such as Friedreich ataxia, a rare condition in which patients develop nervous system damage and often various forms of heart disease. 

Artificial-intelligence developers are helping hospitals and medical providers manage jammed phone lines, as Americans race to secure a place in line for Covid-19 vaccinations—or get a test or screening as they wait, Angus Loten reports for WSJ Pro.

Funds

Venrock raised $450 million for its Venrock 9 fund, the same amount the firm collected for its previous two funds in 2017 and 2014. With the new fund, Venrock will continue making early-stage investments in technology and health-care companies.

Redmile Group, a San Francisco-based firm that backs health-care funds and deals, has rounded up at least $500.2 million so far for its latest venture fund, Redmile Biopharma Investments III LP, according to a regulatory filing.

People

Early-stage health-care and life sciences investor Santé Ventures appointed Omar Khalil as partner, Victoria Nguyen as head of data and analytics and Brooke Jones as head of capital formation. The firm also promoted James Eadie to managing director and Dennis McWilliams to partner. Mr. Khalil previously held executive roles at Kaléo and Baxter International Inc. Ms. Nguyen was previously chief innovation officer at Whitespace Solutions. Ms. Jones was director at Brooklands Capital Strategies and Bank of America Merrill Lynch. Prior to joining Santé Ventures in 2010, Mr. Eadie was a major and military physician in the U.S. Air Force. Before Santé, Mr. McWilliams founded SparkMed Advisors, Apollo Endosurgery and Chrysalis BioTechnology.

Antibody technology developer Clarametyx Biosciences Inc. promoted David Richards to chief executive. Prior to joining the company, he served in operational and general counsel roles at Aclipse Therapeutics. Clarametyx also appointed Larry Edwards, president and CEO of La Jolla Pharmaceutical and Tetraphase Pharmaceuticals, to the board. Columbus, Ohio-based Clarametyx launched in May with seed funding from investors including Rev1 Ventures and Ohio Innovation Fund.

Autobahn Therapeutics, a San Diego-based developer of regenerative medicines for people with central nervous system disorders, promoted Scott Forrest to chief financial officer from chief business officer. Additionally, Scott Giacobello, CFO at GW Pharmaceuticals, was appointed to the company’s board. Prior to joining Autobahn in July, Mr. Forrest was chief operating officer and CFO at Inception Therapeutics.

Exits

Women's health provider Hologic Inc. agreed to acquire Biotheranostics Inc., which provides molecular diagnostic tests for breast and metastatic cancers, for about $230 million. Evidity Health Capital, HealthQuest Capital and MMM Partners list San Diego-based Biotheranostics in their portfolios.

Cancer screening and diagnostic test company Exact Sciences Corp. acquired Thrive Earlier Detection Corp., which is developing a blood test to detect cancer, for an undisclosed amount. In July, Cambridge, Mass.-based Thrive Earlier Detection raised a $257 million Series B round from investors including Casdin Capital, Section 32, Bain Capital Life Sciences, Lux Capital, Perceptive Advisors, and funds and accounts advised by T. Rowe Price Associates Inc.

Ikena Oncology Inc., a Boston-based cancer therapy developer, closed a $120 million Series B round led by Omega Funds. Additional new investors Fidelity Management & Research Co., Surveyor Capital, Invus, Farallon Capital Management, BVF Partners, Cowen Healthcare Investments, Logos Capital and HealthCor Management also participated in the funding, along with previous backers Atlas Venture, OrbiMed and Bristol Myers Squibb. Otello Stampacchia, managing director of Omega Fund, will join the board.

Senti Biosciences Inc., a South San Francisco, Calif.-based startup using synthetic biology to create a new breed of cellular therapies for cancer, secured $105 million in Series B financing led by Leaps by Bayer. New investors Matrix Partners China, Mirae Asset Capital, Ridgeback Capital and Intel Capital were joined by existing backers New Enterprise Associates, 8VC, Amgen Ventures and Lux Capital in the round.  

Terns Pharmaceuticals Inc., a Foster City, Calif.-based startup working on treatments for non-alcoholic steatohepatitis and other chronic liver diseases, closed an $87 million Series C round. Deerfield Management led the investment, which included participation from Eli Lilly & Co., OrbiMed, Lilly Asia Ventures, Vivo Capital, Samsara Capital, Suvretta Capital Management and others. Elise Wang, partner at Deerfield, joined the company’s board.

IconOVir Bio Inc., a San Diego-based developer of therapies to improve the treatment of patients with cancer, raised $77 million in Series A funding. Nextech and Vida Ventures led the round, which included support from Two River Group, Bellco Capital, Polaris Partners, GV, Wellington Partners Venture Capital and Logos Capital. The company also appointed Mark McCamish as chief executive. He was previously president and CEO of Forty Seven Inc.

Immuneering Corp., a Cambridge, Mass.-based startup that uses computational technology for drug discovery, completed a $62 million Series B round. Cormorant Asset Management led the financing, which included participation from Surveyor Capital, Rock Springs Capital, funds and accounts advised by T. Rowe Price Associates Inc., funds and accounts managed by BlackRock, Perceptive Advisors and LYFE Capital.

Carisma Therapeutics Inc., a Philadelphia-based startup developing novel cancer therapeutics, landed a $47 million Series B round led by Symbiosis II. New investors Solasta Ventures and Livzon Pharmaceutical Group Inc. also contributed to the funding, along with returning backers AbbVie Ventures, HealthCap, Wellington Partners, IP Group, TPG Biotech, Agent Capital and MRL Ventures Fund.

Biomea Fusion Inc., a Redwood City, Calif.-based cancer treatment startup, picked up $56 million in Series A financing. Cormorant Asset Management led the investment, which included contributions from Boxer Capital of Tavistock Group, Janus Henderson Investors, Rock Springs Capital, RTW Investments, Aisling Capital, Point Sur Investors, Logos Capital and Clifton Capital.

CorWave, a French developer of cardiac assist devices, nabbed $40 million in Series C financing from EIC Fund, Bpifrance, Novo Holdings, Seventure, Sofinnova Partners and Ysios Capital.

Volta Medical, a French startup working on novel artificial intelligence algorithms to treat cardiac arrythmias, landed a $28 million investment. Gilde Healthcare led the funding, and was joined by Pasteur Mutualité. Denis Gestin and Gilde Healthcare’s Janke Dittmer will join the board.

SocialClimb, a Lehi, Utah-based patient acquisition platform for doctors, practices and hospitals, fetched a $12 million investment from Resolve Growth Partners.

Monument Inc., a New York-based online platform that addresses alcohol use disorder, snagged a $10.3 million Series A investment led by VMG Catalyst.

Thistle, a San Francisco-based healthy meal delivery startup, fetched $10.3 million in Series B funding. PowerPlant Ventures led the round, which included participation from Siddhi Capital, Alumni Ventures Group and Rich Products Corp.’s venture arm.

NextStep, a Seattle-based startup that retrains displaced workers to begin careers in the health-care sector, grabbed a $2.5 million investment from ZOMA Capital, ETF@JFFlabs, Springrock Ventures and JAZZ Venture Partners.

• Covid-19 vaccine rollout at nursing homes encounters fewer residents, reluctant staff
   
• Nations stretch scarce Covid-19 vaccines by delaying a second shot
   
• Moderna raises Covid-19 vaccine production estimate
   
• Finally, a use for the old Sears: Covid-19 vaccine center
   
• Crispr gene-editing treatment could point way to fix for deadly aging disease
   
• Walgreens Boots to sell pharmacy wholesale unit to AmerisourceBergen

• Engineered protein patches could boost immunotherapy (Fierce Biotech)
   
• Biotech company Autolus chops 20% of staff (Endpoints News)
   
• Operation Warp Speed’s Moncef Slaoui will stay on as a consultant for Biden (STAT News)
   
• Children's hospitals grapple with wave of mental illness (Kaiser Health News)​

This newsletter was compiled by Brian Gormley and Zachary Cole.

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The Team: Matthew Strozier, Yuliya Chernova, Brian Gormley and Marc Vartabedian.

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