Startups

Flagship Pioneering forges ahead with $618M capital raise

The capital raise is the culmination of a year that was punctuated with two of its portfolio companies filing initial public offerings and the hire of J.P. Morgan veteran Stephen Berenson.

A Cambridge, Massachusetts-based venture capital fund has raised $618 million to invest in biotech and life science startups. Flagship Pioneering, which dates back to 2000 and was previously known as Flagship Ventures, seeds startups through its VentureLabs hub.

The capital raise is the culmination of a year that was punctuated with two of its portfolio companies filing initial public offerings and the hire of J.P. Morgan veteran Stephen Berenson, who most recently served as the vice chairman of investment banking.

Fourteen of Flagship Pioneering’s portfolio companies have gone public in the past four years. This month early stage biotech business Denali Therapeutics (NASDAQ: DNLI) and 10-year-old diagnostics company Quanterix (NASDAQ: QTRX) each did IPOs. They reflect the diverse range of the companies in which Flagship invests.

Quanterix developed a biomarker analysis product to detect low levels of proteins in blood or other fluids. Its IPO popped with a share increase of more than 16 percent. As The Wall Street Journal pointed out, drug developers enlist Quanterix’s technology in clinical trials to determine if their drugs are having the desired effect on protein markers. The fact that the company’s business model is centered on research and development and is generating revenue put it in a different category than many other biotech companies going public.

Denali Therapeutics, a company founded by former Genentech staff that develops therapies for neurodegenerative diseases such as Alzheimer’s and Parkinson’s disease and ALS, had the largest IPO for the year to date. It raised $250 million after pricing at the midpoint of the projected $17 to $19 share price range.

Dr. Noubar Afeyan, founder and chief executive officer of Flagship Pioneering, said the new capital will fuel the firm’s unique model. He noted in a company statement that his business seeks to blend scientific foresight and creativity, risk mitigation,  entrepreneurship, and professional capital management.

Photo: Abscent84, Getty Images