Alts Watch Healthcare Beat: Nearly $1bn in fresh capital flows in latest life sciences deals

In numerical terms, our latest recon of private market investment in the life sciences is about on par with the previous week: 13 deals with a total value of $987 million. But there was a noticeable difference on the focus of the deals. Drugmakers (mostly in the biotechnology space) took the lion's share of funding in our previous tallies, but this time much of the funding accrues to digital health ventures, ranging from electronic health records providers to developers of apps that help individuals manage their health and wellness. Going forward, it will be interesting to see whether this was an anomaly or a sign of a growing trend. That said, the two biggest deals of the week happened in the biotech space, and in both cases the beneficiaries were companies aiming to address major unmet needs in the Chinese market. Pegbio The deal: 800 million yuan ($122 million) in a pre-IPO round (series unknown)The players: The round was co-led by three Chinese heavy hitters -- Jack Ma’s YF Capital, private equity firm Yingke PE and life sciences-focused venture firm TF Capital. State-backed Qianhai FoF joined as a new investor, along with Zhongxin Huihai Investment Fund Management and Yuanfeng Capital. YuanBio Venture Capital, another healthcare-focused VC firm that help Pegbio get off the ground n 2014, was also aboard as a returning investor.The play: Suzhou-based Pegbio, founded by Chinese-American scientist Michael Xu, has partnered with Pfizer to develop a new generation of diabetes treatments. Its lead drug candidate, PB-119, targets type 2 diabetes and is undergoing a Phase III clinical trial in China, where the share of adults with diabetes has soared from 1% in 1980 to 12.8% today. SciNeuro Pharmaceuticals The deal: $100 million Series A financing The players: The round was co-led by Lilly Asia Ventures Fund and Arch Venture Partners, with the participation of Sequoia Capital China, Boyu Capital, General Atlantic, TF Capital and Zoo Capital.The play: Shanghai-based SciNeuro is developing treatments for central nervous system diseases -- another booming market in its homeland. “One in every six people in China is living with a CNS condition, yet there are relatively few effective treatments available today, underscoring the urgent need to develop and deliver novel, effective therapies," said SciNeuro Founder and CEO Min Li. Reneo Pharmaceuticals The deal: $95 million Series B roundThe players: Financing co-led by Novo Ventures and Abingworth, with new investors Rock Springs Capital, Aisling Capital and Amzak Health, as well as existing investors including New Enterprise Associates, RiverVest Venture Partners, Pappas Capital, and Lundbeckfonden VenturesThe play: San Diego-based Reneo Pharmaceuticals is developing treatments for patients with rare, often lethal genetic mitochondrial diseases. Its lead product candidate, REN001, is expected to enter Phase II trials in early 2021. Edgewise Therapeutics The deal: $95 million Series C roundThe players: Financing led by Viking Global Investors; new investors included Janus Henderson Investors, Citadel's Surveyor Capital, RA Capital Management, Cormorant Asset Management, Logos Capital and Wellington Management; existing investors OrbiMed, Novo Holdings, US Venture Partners, Deerfield Management and New Leaf Ventures also participated.The play: Boulder, Colorado-based Edgewise Therapeutics is focused on small molecule therapies for rare musculoskeletal diseases. Its lead drug candidate, EDG-5506, is in development for Becker muscular dystrophy and Duchenne muscular dystrophy. Microtech Medical The deal: 575 million yuan ($87.9 million) Series D roundThe players: Tencent, IDG Capital and Taikang Asset Management co-led the round. China Everbright Limited, Zhongjin Pucheng Investment and 3H Health Investment joined as new investors, along with existing investors Qiming Venture Partners, Lilly Asia Ventures, CD Capital and Shanghai Guofang FOF Equity Investment Management.The play: Hangzhou, China-based Microtech Medical is focused on technology-enabled diagnostics and treatment for diabetes. The company has a development center in Silicon Valley and marketed products including the wearable Equil Patch Insulin Pump System Faze Medicines The deal: $81 million Series A roundThe players: Led by Third Rock Ventures with Invus, Catalio Capital Management, Casdin Capital and Alexandria Venture Investments participating.The play: Cambridge, Massachusetts-based Faze Medicines is a pioneer in the emerging field of biomolecular condensates, which is particularly promising for neurodegenerative disorders. The Series A will support Faze’s preclinical research in amyotrophic lateral sclerosis and myotonic dystrophy type 1. Pear Therapeutics The deal: $80 million Series D roundThe players: SoftBank’s Vision Fund 2 fund led the round, with new investors including Forth Management, Pilot House, Sarissa Capital, Shanda Group and QUAD Investment Management; returning investors included Temasek, 5AM Ventures, Arboretum Ventures, JAZZ Venture Partners, CrimsoNox and EDBI.The play: Boston-based Pear Therapeutics will use the funding to commercialize its three prescription digital therapeutics: reSET, which delivers cognitive behavioral therapy for substance abuse disorder in outpatients settings; ReSET-O for opioid use disorder; and Somryst, an artificial intelligence-powered chronic insomnia therapy. Calm The deal: $75 million Series C financingThe players: Existing investor Lightspeed Venture Partners led the round, with TPG, Insight Venture Partners, Marc Benioff and funds managed by Goldman Sachs Asset Management participating.The play: San Francisco-based Calm is a mental wellness brand providing an app for sleep, meditation and relaxation with over 100 million downloads and 4 million paying members. The company plans to use the funding to expand its enterprise arm, Calm for Business. Rani Therapeutics The deal: $69 million Series E roundThe players: Undisclosed. Previous investors have included Bossa Ventures, Cathay Venture, Alphabet's investment arm GV, Ping An Ventures and Virtus Ventures.The play: San Jose, California-based Rani Therapeutics will use the funding to advance development of its RaniPill, a so-called "robotic" pill designed to make it easier for patients to take drugs that usually require an injection or infusion, such as treatments for diabetes and arthritis. Vigil Neuroscience The deal: $50 million series A roundThe players: The round was co-led by Atlas Venture and Northpond Ventures and included participating investors Hatteras Venture Partners and Alexandria Venture Investments.The play: Cambridge, Massachusetts-based Vigil Neuroscience is developing treatments for neurodegenerative diseases. The company expects the funding to take its lead product candidate, a monoclonal antibody TREM2 agonist, through Phase I studies. CG Oncology The deal: $47 million Series D roundNew investor Kissei Pharmaceutical led the round, with participation from existing investors ORI Healthcare Fund, Camford Capital and Perseverance Capital Management.The play: Irvine, California-based CG Oncology is developing cancer immunotherapies. The financing will take its lead compound, CG0070, through a Phase III trial s a monotherapy for BCG-unresponsive, non-muscle invasive bladder cancer, and a Phase II study in combination with Merck & Co.'s Keytruda in the same indication. PepGen The deal: $45 million Series A fundingThe players: RA Capital Management led the round, with participation from Oxford Sciences InnovationOxford, UK-based PepGen will use the funding to advance development of its next-generation cell-penetrating peptides for the treatment of Duchenne muscular dystrophy and other severe neuromuscular diseases Elation Health The deal: $40 million series C financing roundThe players: Generation Investment Management led the round, with participation from existing investors including Threshold Ventures and Kapor Capital.The play: San Francisco-based Elation Health will use the funding to expand its platform for independent primary care practices, which includes health records and integrated tools for telehealth and patient engagement

Sergio Barreto

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