BioPharma, Startups

ARCH Venture, Flagship Pioneering close funds worth nearly $2.6B

On Thursday, Flagship announced it had closed a fund worth $1.1 billion, while ARCH closed two funds worth a combined $1.46 billion. Both firms’ announcements included nods to the ongoing Covid-19 pandemic.

Two large venture capital firms have raised nearly $2.6 billion that they plan to invest in life sciences startups, they said in announcements Thursday.

Cambridge, Massachusetts-based Flagship Pioneering said it had closed a $1.1 billion capital raise last Friday for its seventh Origination Fund. Meanwhile, Chicago-based ARCH Venture Partners said it had closed two new funds, ARCH Venture Fund X and Arch Venture Fund X Overage, with a total value of $1.46 billion.

ARCH said it would use its two funds to invest in early-stage companies. Although it plans to frequently draw from both to invest in a single company, the overage fund will be used in fewer deals that require larger investments.

“ARCH is still willing to sit down with a scientist with a lab notebook to develop and translate great science into great companies,” said Steve Gillis, an ARCH managing director, in a statement. “Fundamental science is what drives us, and creating new diagnostics and disease-modifying ”

Flagship said that its new fund would operate alongside existing ones and that it would use the money to support companies that it had helped to build and their financial needs after they have spun out of Flagship Labs and entered their growth stage.

“We’re honored to have the strong support of our existing limited partners, as well as the interest from a select group of new limited partners, to support Flagship’s unique form of company origination during this time of unprecedented economic uncertainty,” Flagship CEO Noubar Afeyan said in a statement. “We will continue to use our hypothesis-driven process of pioneering innovation and entrepreneurship to originate disruptive companies in human health and sustainability.”

Afeyan added that the firm plans to pursue development in areas like developing “disruptive product ideas” from existing companies’ platforms, artificial intelligence and health security, which he defined as products and therapies to improve societal health defenses.

Both companies announcements included nods to the ongoing Covid-19 pandemic, with Afeyan pointing to it as underscoring what he called the need for the health security initiative. ARCH highlighted companies it has invested in that are developing therapeutics for it, including Vir Biotechnology, Alnylam Pharmaceuticals, VBI Vaccines, Brii Biosciences and Sana Biotechnology. Others include Quanterix, working on technology related to testing and clinical trial continuity; Twist Bioscience’s genomic and genetic engineering tools are used to develop Covid-19 drugs and vaccines; and Bellerophon Therapeutics’ inhaled nitric oxide delivery system recently got an emergency expanded access approval from the Food and Drug Administration for the disease, ARCH said.

Photo: Feodora Chiosea, Getty Images