Alts Watch Healthcare Beat: HF, PE and mutual fund giants allocate $300m

Farallon Capital Management, Millennium Management, Magnetar and Ziff Capital are among the growing number of hedge funds, private equity firms and mutual fund companies investing in private placement rounds with biotech startups in this week's Alts Watch Healthcare Beat. We tracked a total of three deals involving $300 million in fresh capital in the shortened holiday week ending December 27. The focus ranged from clinical diagnostics, immunotherapies and the promise of "molecular" glue. As always, here is our summary of who, what and why each company story is attracting attention. Gritstone Oncology The deal: A securities purchase agreement to raise gross proceeds of $110 million resulting from the sale of shares of its common stock and/or pre-funded warrants through a private investment in public equity (PIPE) financing at a price per share of $3.34.The players: The financing was led by certain existing and new investors, Redmile Group, Avidity Partners and EcoR1 Capital.The play: Gritstone, a clinical-stage biotechnology company developing the next generation of cancer immunotherapies to fight multiple cancer types, expects to use net proceeds from this private placement to fund research and development expenses, including the clinical development of its lead cancer immunotherapies, Granite and Slate, and advancement of opportunities from its core technologies, including Gritstone EDGE and vaccine platforms. The Emeryville, California-based Nasdaq-listed company is one of a number of biotech companies related to groundbreaking T-Cell therapies. Neomorph The deal: Series A round of financing totaling $109 millionThe players: The $13 billion investment firm Deerfield Management Company established Neomorph earlier this year with scientific founders Phil Chamberlain, DPhil; Eric Fischer, PhD; Benjamin Ebert, MD, PhD; and Scott Armstrong, MD, PhD.The play: A venture-backed biotechnology company based in San Diego, Neomorph is building a leading protein degradation entity, focused on “molecular glue” degraders working in partnership with the Dana Farber Cancer Institute. Neomorph’s mission is to use this technology to solve critical problems in human health with the discovery and development of innovative new medicines against “undruggable targets”. SomaLogic The deal: The company raised $81 million in addition to its current funding round with investments from a number of additional investors, for a total Series A raise of $214 million.The players: The Series A financing was led by noted life science investor Casdin Capital, with participation in the first November close from Farallon Capital Management, Foresite Capital, funds and accounts advised by T. Rowe Price Associates, Inc., Blue Water Life Science Advisors, Madryn Asset Management, Fiscus Ventures and Reimagined Ventures (affiliates of Magnetar Capital), Monashee Investment Management, Mossrock Capital, Soleus Capital and others. In this second close, additional financial investors include Janus Henderson Investors, Redmile Group, Logos Capital, Revelation Partners, Ziff Capital Healthcare Ventures, Boston Millennia Partners and Millennium Management.The play: The Boulder, Colorado-based diagnostic company focuses on identifying proteins. The funds raised in this round will facilitate improving, expanding and commercializing SomaLogic’s proteomic products in both the clinical and life science markets.

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