Pharma

What’s special about the 3 biotechs in the top 10 for Q2 venture investments?

Cellular engineering, precision medicine, and using G protein-coupled receptors to treat heart failure and other conditions. That’s the focus of the three biotechnology companies that made the top 10 for venture investment deals last quarter. Biotechnology was the second largest sector for investment with $1.3 billion going into 103 deals, a 41 percent increase, according […]

Cellular engineering, precision medicine, and using G protein-coupled receptors to treat heart failure and other conditions. That’s the focus of the three biotechnology companies that made the top 10 for venture investment deals last quarter. Biotechnology was the second largest sector for investment with $1.3 billion going into 103 deals, a 41 percent increase, according to a quarterly report by PwC and the National Venture Capital Association.

By the NVCA’s reckoning, the second quarter dealflow gives it reason to believe that we’re witnessing what could be the beginnings of a slow, steady recovery for biotech investment. But that depends on the U.S. Food and Drug Administration backing up its talk of reform with meaningful actions.

Other encouraging signs were an increase in early stage investing across industries and that first-time investments in the quarter accounted for 40 percent of the dollars and 42 percent of the companies receiving funding in Q2. Early stage investing for life science companies in particular experienced a dramatic increase, more than doubling in dollars from the prior quarter to $328 million.

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But let’s look a little more closely at the those three biotechnology companies and what they say about what is drawing investor attention. Two of the three provide valuable services to other life science companies. The third has a heart failure treatment in late stage development.

Precision for Medicine  The Maryland company’s name derives from the sub branch of medicine targeting molecular anomalies — a hot area for life sciences. But more than that,  it involves identifying patients who are more susceptible to certain diseases and who will respond to treatments differently. It also is about identifying patients with diseases or conditions that will progress on a different course than others in the general population, and then engaging those patients to improve outcomes, according to a description from the company’s website. Additionally it does biobanking for life science companies.

It secured $150 million in early stage funding from J.H. Whitney & Co. LLC and Oak Investment Partners. It’s an early stage company. Early stage investments reached $5.2 million in the second quarter — an encouraging uptick from the $3.7n million in early stage investments from the first quarter. Its chief strategy officer who joined in April — Vicki Seyfer-Margolis — came from the FDA where she led its personalized medicine initiative.

“The increase in early stage investing is an encouraging sign that entrepreneurs with innovative ideas can get the funding they need to succeed,” said Mark McCaffrey, global technology partner at PwC US in a press statement. “As the exit window continues to open, we’ll continue to see VCs shifting their focus back to companies in the earlier stages of development.”

Intrexon Corp. The Virginia synthetic biology company received $85.6 million in later stage investment from Sandbox Industries, Third Security and two undisclosed firms. It designs, builds and regulates gene programs, stored within vectors that transmit genetic information. They in turn generate genetically modified cell systems that can be used to produce, proteins more cheaply and efficiently, according to the registration statement filed for its upcoming initial public offering.  It’s seeking to raise up to $125 million in its IPO.

It also has some really cool proprietary software as well and through that it can design, test and learn about gene targets. It can also develop predictive computer models of organisms, and it can build virtual cells and simulate a cell’s reaction, among other things.

Its business model depends on collaborations with other companies on licensing deals. Among them is Ziopharm Oncology that’s developing and commercializing cancer therapeutics. It is also collaborating with Fibrocell, Oragenics, Synthetic Biologics and AmpliPhi, among others.

The company is led and partly financed by billionaire biotech investor Randall J Kirk and his venture fund Third Security. It was founded by Thomas D. Reed in 1998 who Kirk referred to in an interview with Forbes as the Henry Ford of DNA.

Trevena The King of Prussia, Pennsylvania based biotech firm is developing drugs using G protein-coupled receptors that transmit chemical signals to a wide variety of cells. GPCRs are also the most heavily investigated drug targets in the pharmaceutical industry. The company’s lead product is an intravenous drug that targets a receptor that plays a key role in heart failure. The market opportunity is substantial. Acute decompensated heart failure affects 5 million people in the U.S. and 20 million globally. It’s also the fourth leading cause of death. Hospitalizations have increased due to an aging population.

It’s led by Maxine Gowen. Earlier this year it inked a licensing deal with Forest Labs valued at up to $430 million. It also received $60 million in early stage funding from investors that included Alta Partners, HealthCare Ventures, New Enterprise Associates, Polaris Partners, and Yasuda Enterprise Development, among others.