Biotech crashes to worst month for PE, VC investment in last 12 months

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The biotech sector has slumped to its worst month for private equity and venture capital investment in the last 12 months thanks to a dearth of $100m-plus deals.

The $417m invested in the sector globally by PE and VC houses in September was even worse than the previous 12-monthly low of $420m recorded in June according to data from Moody’s Analytics subsidiary Bureau van Dijk.

September’s results were in stark contrast to the annual high recorded in August, when 52 deals saw more than $2.86bn of private equity and venture capital investment.

Deal volume has remained broadly consistent with figures across the last 12 months, which have largely fluctuated between the high 40s and mid-50s.

Value was down year-on-year from September 2018’s $726m, although volume was 11 per cent higher.

No company managed an investment of over $100m from PE or VC sources in the month under review, with the largest deal seeing Canadian cancer drug developer Repare Therapeutics score $83m through a Series B round.

That included backing from Healthcare Royalty Partners, OrbiMed Advisors, Redmile Group, BVF Partners, LOGOS Capital Management, Versant Venture Management, MPM Capital, Fonds de Solidarite des Travailleurs du Quebec and The Business Development Bank of Canada.

The second- and third-largest deals of the month targeted US biotech companies, with Ansun Biopharma of California raising $78m and Meissa Vaccines, a Californian respiratory syncytial virus and rhinovirus vaccines develop, secured a $30m in a series A round of funding led by Morningside Ventures.

Four targets based in the Far East and Central Asia featured in the top 20 deals by value, BvD said, the largest a $28m series B round by Chinese cancer gene researcher Beijing Jiyinjia Technology.

The funding was funding led by Co-Stone Asset Management and featured participation from BGI Genomics, Shanghai Volcanics Investment Management, Green Pine Capital Partners, UEC Group, Sichuan Deshang Fortune Investment Management Group and other new and existing investors.

Companies based in the US and Canada notched up the lion’s share of PE, VC and DC value in September, unsurprising given the North America region featured in a total of 12 of the top 20 deals by value.

US-based targets placed first by both volume and value in the four-week period with 32 deals worth $197m.

In terms of value, Canada placed second with $83m from the Repare deal, while the UK was third with $33m.

China was just pipped into third place after picking up $32m, while Denmark received $22m and Japan $19m, the report said.

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