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Tough Economic Climate Encourages Collaboration Among Founders, VCs
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By Brian Gormley, WSJ Pro
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Good day. Challenging economic conditions are encouraging more communication between biotechnology startups and venture investors and among company founders, some entrepreneurs say.
Biotech venture funding and valuations remain strong so far this year, according to industry data. But with the public markets now largely closed to initial public offerings and amid broad economic turmoil, entrepreneurs face a good deal of uncertainty.
In a difficult environment, the need for close collaboration between investors and founders increases, said Jack O’Meara, co-founder and chief executive of biotech startup Ochre Bio, who said he has been having more informal communication with investors recently.
“We’ll see a strengthening of relationships between entrepreneurs and investors,” he said.
A more unstable financing climate will also help reveal which venture capitalists live up to their promise to take a long-term approach as they invest and work with startups, said Jake Becraft, co-founder and CEO of biotech startup Strand Therapeutics.
“A lot of people say that, less actually act like that,” he said.
Biotech entrepreneurs are also gathering in founder groups that meet to share advice, something that is more important now because of the difficult conditions, said Lex Rovner, co-founder and CEO of startup 64x Bio.
“This is definitely an environment where founders need to support each other,” she said.
And now on to the news...
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Rubedo Life Sciences, a startup whose drugs target senescent cells, held a first closing on a Series A round in December 2021 and expects to complete the financing later this year.
PHOTO: ALESSANDRO GANDOLFI
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Biotech valuations. Venture-capital funding and valuations for biotechnology startups remain high despite economic turmoil and this year’s sputtering market for initial public offerings, industry data show.
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Biotech venture investment has climbed recently, spurred by the Covid-19 pandemic, new approaches to treating diseases, a favorable regulatory climate and repeat entrepreneurs launching companies.
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U.S. and European biotechs raised a combined $36.83 billion in 2021, a record total, according to Silicon Valley Bank. Valuations also rose in 2021 as biotech IPOs sizzled.
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U.S. and European drugmakers secured a combined $17.1 billion in venture capital through June 30, according to SVB. Biotech startup valuations rose in the first half, but sustaining valuation increases will grow more difficult the longer market uncertainty deters IPOs.
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$6 Billion+
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The total potential value of a collaboration between drugmakers Poseida Therapeutics Inc. and Roche Holding AG.
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Signify Health Considers Strategic Alternatives, Including a Sale
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Signify Health Inc. is working with bankers to explore strategic alternatives including a sale, according to people familiar with the matter, roughly 18 months after the healthcare-services company’s initial public offering of stock, The Wall Street Journal's Laura Cooper and Cara Lombardo report. Signify Health, which had a market value of more than $4 billion on Tuesday afternoon, supplies technology that helps health plans and providers with in-home care. It could attract interest from private-equity firms as well as managed-care providers, the people said.
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Funds
Fusion Fund, which makes early-stage investments across the healthcare, enterprise AI and industrial automation sectors, closed its third fund with $120 million in commitments. The Palo Alto, Calif.-based firm closed its second fund at $85 million in 2018.
People
Baird Capital, the venture capital and private equity arm of Baird, announced the appointments of Melissa Kandinata as vice president and John Reim as associate, along with the promotion of Matt Gura to senior associate, all on the firm’s venture capital team. Ms. Kandinata previously held positions at Cisco Investments, FHI 360 and Citigroup. Mr. Reim was previously a senior investment banking analyst at Citigroup. Before joining Baird Capital in 2020, Mr. Gura was an investment banking analyst at Baird. Baird Capital focuses on sectors including healthcare and industrial technology.
Alltrna, a transfer RNA platform company, appointed Joanne Protano as chief financial officer. She was most recently senior vice president of finance and operations at Rubius Therapeutics. Cambridge, Mass.-based Alltrna is backed by Flagship Pioneering.
Mental health platform Modern Health named Jesse Calderon to the post of chief technology officer. He was previously a senior vice president at Tableau. San Francisco-based Modern Health has raised more than $172 million from investors including Founders Fund, Battery Ventures, Felicis Ventures, Kleiner Perkins and Afore Capital.
Exits
Kindbody, a fertility clinic network and family-building benefits provider, acquired gestational surrogacy agency Alternative Reproductive Resources. Terms weren’t disclosed. Kindbody has raised $154 million in funding from investors including Perceptive Advisors, GV, RRE Capital, Claritas Health Ventures, Rock Springs Capital, NFP Ventures and TQ Ventures.
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Sironax, a China-based developer of novel treatments for patients with age-related degenerative diseases, completed a $200 million Series B round led by Gaorong Capital and Yunfeng Capital. New investors including MSA Capital, CBC Group and Future Innovation Fund also joined in the round, along with existing backers Temasek, Invus, F-Prime Capital, Eight Roads, ARCH Venture Partners and K2 Venture Partners.
IDRx Inc., a Plymouth, Mass.-based cancer therapy developer, launched with a $122 million Series A investment. Andreessen Horowitz and Casdin Capital led the round, which included participation from Nextech Invest, Forge Life Science Partners and others.
Homeward, a San Francisco-startup, secured $50 million in Series B financing to help improve access to healthcare in rural communities. Co-lead investors ARCH Venture Partners and Human Capital were joined by General Catalyst and others in the round.
Atia Vision Inc., a Campbell, Calif.-based developer of a modular presbyopia-correcting intraocular lens, held the first close of a $42 million Series E round. Cormorant Asset Management led the investment, which included contributions from the Capital Partnership, PA MedTech VC Fund, AMED Ventures and others.
Oui Therapeutics Inc., a New Haven, Conn.-based startup offering a digital therapeutic for suicide prevention, launched with $26 million in funding from First Round Capital and CVS Health Ventures.
Suvera, a U.K.-based remote clinic startup, added £5 million (about $6 million) in seed extension financing led by Morningside Ventures.
Carefeed, a Cincinnati-based digital communication platform for skilled nursing and senior living communities, picked up a $3 million investment. Led by Reformation Partners, the round included contributions from Allos Ventures and M25.
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Moderna is the latest drugmaker to post quarterly sales gains because of continued demand for its Covid-19 products.
PHOTO: ROGELIO V. SOLIS/ASSOCIATED PRESS
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Regeneron president says he's on the trail of the holy grail for cancer immunotherapy (Endpoints News)
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Red Cross begins to screen blood donors for monkeypox (STAT)
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A new approach to preventing malaria (New England Journal of Medicine)
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How Belite Bio emerged as one of biotech’s best-performing IPOs (Biopharma Dive)
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