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Oncology Ventures Battles Cancer With Data
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By Brian Gormley, WSJ Pro
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Good day. Venture capitalists often invest in startups developing drugs for cancer. But data also is a potent weapon against the disease, according to Oncology Ventures, a cancer-focused venture firm that recently raised $30 million for its first fund, drawing support from strategic investors, such as Moffitt Cancer Center, and financial backers.
The New York-based firm backs startups using data and artificial intelligence to detect cancer sooner, help patients navigate the medical system and improve cancer care and research. Portfolio company Reimagine Care, for example, uses an AI-based virtual assistant and a human team to check in on patients and help them manage things like the side effects of treatment.
Part of Oncology Ventures’ strategy is to assist portfolio companies as they seek contracts with its strategic limited partners and other institutions. “We are just coming in to help them put that fuel on the fire and get them in with the right groups,” said founder and Managing Partner Ben Freeberg, who was diagnosed with testicular cancer at age 24 and is now 31 and cancer-free. We spoke with him about his firm’s first fund and strategy. Here are excerpts from the conversation, edited for length and clarity.
WSJ Pro: Your strategy of financing data-driven oncology startups is highly specialized. How did investors receive it during your fundraising?
Freeberg: Folks at the beginning of this process were very much in the vein of, is this a big-enough market? We’re focused on cancer within healthcare, and data and infrastructure within cancer. That pushback has gone away.
WSJ Pro: What convinced them that this is a sector that warrants a venture fund?
Freeberg: Folks understood that cancer is this large and growing opportunity. For one, spend is rising at an unsustainable rate. Patients are going broke and at the same time, we have a lot of amazing innovation out there. It’s just not getting in the hands of the right folks. What resonated was the ability to truly impact outcomes today.
WSJ Pro: What market trends made your approach timely?
Freeberg: The buyer universe is ready. It’s been really difficult in the past to figure out the right business model in this space. Now, new CPT [insurance] codes reimburse for care navigation. Health systems, community oncology systems and pharma are getting excited about buying and investing into solutions like this.
And now on to the news...
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Three Medly Health executives defrauded investors during capital-raising efforts that landed the now-defunct digital pharmacy startup over $170 million, according to the Securities and Exchange Commission. PHOTO: MEDLY HEALTH INC.
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SEC sends a message to startups. The Securities and Exchange Commission, in a series of recent enforcement actions, is driving home a message to the startup world: Fake it till you make it can be fraud, WSJ Pro reports. Last month, the SEC charged a startup and some of the founders or executives of two others with misleading or defrauding investors. Each of the startups involved received venture funding and the agency has regulatory oversight over startup funding rounds and initial public offerings.
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Startup culture has long encouraged setting lofty or even unrealistic growth projections to maximize company potential and catch the attention of investors and customers. The SEC has said entrepreneurs can’t commit fraud in the process.
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“Startup founders cannot fake it until they make it by falsifying revenue metrics shared with investors,” Monique Winkler, director of the SEC’s San Francisco office, said in a statement while charging the former chief executive of business-automation software startup Skael with lying to investors about the company’s revenue figures.
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CVS, Considering a Breakup, Will Find It’s Hard to Do
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CVS Health has spent more than $88 billion in the past half-dozen years to add a major health insurer, a clinic operator and a home-visit provider to its namesake pharmacies. Now, the healthcare company might break it all up, The Wall Street Journal reports. After CVS repeatedly cut its financial forecasts and its shares plunged, its board is conducting a strategic review that includes the possibility of splitting the company, according to people with knowledge of the matter. The board isn’t expected to make a decision soon, and it could choose to avoid making major changes. Separating the pieces would be difficult, with a danger of orphaning units that might struggle to flourish on their own,
analysts said.
More: A CVS Breakup Is No Easy Fix for Its Problems
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OpenAI Nearly Doubles Valuation to $157 Billion in Funding Round
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OpenAI has raised $6.6 billion in new funding, capping a complex fundraising process, WSJ reports. Investors are valuing the startup at $157 billion. OpenAI was last valued at $86 billion early this year, when employees sold existing shares.
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The new round was led by Thrive Capital, which is putting $1.25 billion into the company, according to people familiar with the matter. Microsoft is investing a little less than $1 billion.
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New investors include SoftBank, which is putting in around $500 million, and AI chip maker Nvidia, which is investing about $100 million, one of the people familiar with the matter said.
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Investment firm Tiger Global Management is putting in $350 million. Cathie Wood’s Ark Investment Management and Altimeter Capital are each putting in about $250 million, which is the minimum amount required to review OpenAI’s financial documents.
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Funds
Kurma Partners, an investment firm focused on human health, said it has raised €140 million ($155 million), completing the first closing of Biofund IV. Kurma said it aims to raise a total of €250 million ($276 million) for its newest and largest venture fund by the final closing in 2025.
People
Halda Therapeutics, a New Haven, Conn.-based biotechnology company developing a novel class of cancer therapies, said it has appointed Christian Schade as president and chief executive and as a member of the board. Most recently, he was a growth partner at Flagship Pioneering. Previously, he was CEO of Aprea Therapeutics.
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Kailera Therapeutics, a clinical-stage biopharmaceutical company advancing therapies for obesity and related conditions, said it raised a $400 million Series A financing. The company is developing injectable and oral therapies for chronic weight management. Kailera is based in Waltham, Mass., and San Diego.
Air Doctor, a company involved in travel health, said it has raised $20 million in a Series B round. Air Doctor said it connects travelers to a global network of over 20,000 multilingual doctors and specialists and operates in 84 countries. The company said the investment will fuel its expansion in Asia.
Cartherics, an Australian biotechnology company developing immune-cell therapies for cancer and other diseases, said it has raised more than its target of $10 million in a financing round. Cartherics said this funding will support the initiation of the clinical trial for the company’s lead cell therapy product, aimed at treating ovarian cancer, as well as broadening its pipeline.
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