Google Ventures, Google’s investment fund, has backed consumer tech companies like Uber and Nest — but the biggest percentage of Google Ventures’ assets are now invested in science and, in particular, oncology.
Last year, Google Ventures led a $130 million Series B round of funding for the New York-based startup Flatiron Health, which has a cloud platform that analyzes cancer data.
Google Ventures has a 4% stake in Foundation Medicine, a company that uses genetic information to help facilitate personalized cancer treatments. Roche, the world’s largest biotech company, acquired a majority interest in Foundation Medicine in January.
Google’s investment arm has increased its assets invested in life sciences by 30% in two years, Bloomberg reports. The firm has a team of 70 people, with 17 investment partners.
We are also seeing startups in the biotech quickly get snapped up or source investment.
Celgene (NASDAQ: CELG) paid 30 Million for the right to acquire a brand-new biotech, Northern Biologics earlier this year.
Northern Biologics is the first new startup launched through a Toronto incubator that the big Summit, NJ, drugmaker has helped fund.Northern is developing protein therapies, using monoclonal antibodies to treat cancer and fibrotic disease.
Versant Ventures, a San Francisco-based life science investment firm unveiled Northern Biologics last year, investing $10 million in Series A funding to help the nascent company grow out of a Canadian incubator called Blueline Bioscience. And Celgene has been in the biotech’s orbit since its inception, intrigued by the company’s approach to antibody development.
Versant Ventures, has moved quickly to scout for new companies and hire scientists in Canada. The expansion north has been part of a big strategic shift for Versant as it emerged from the recession that claimed many biotech investors as victims.
Versant founded the Toronto incubator, Blueline Bioscience, where Northern began and Celgene quickly pitched in cash in exchange for early negotiating rights with companies that spin out from Blueline.
Celgene had been exploring Toronto, home to a large medical research community, “in parallel” with Versant, said Celgene senior VP George Golumbeski.
But Celgene, although it makes venture investments (such as the stake announced earlier this year in CRISPR Therapeutics), prefers to let VC firms seed companies. With Blueline, Versant is the active seed funder, and Celgene can come in with capital later if it likes what it sees.
Celgene’s option to acquire Northern came right after the consummation of a similar kind of deal between Celgene and Versant. In 2011, Celgene paid $45 million for the right to buy the Versant-funded Quanticel Pharmaceuticals, which the venture group created to develop a single-cell tumor analysis method based on work by Stanford University researchers. When Celgene’s trigger to buy arrived three and a half years later, the firm pulled it, paying $100 million immediately and potentially $385 million more.
“Celgene’s financial and scientific contributions will enable us to rapidly progress our therapeutic antibodies to the clinic,” Northern Biologics CEO Stefan Larson said in a statement.
For Celgene, whose pipeline has been jokingly compared to an oncology index all its own, the deal fits well with the Big Biotech’s top-down ethos of finding the most promising science in biotech and using its sizable checkbook to bring it in. Earlier this year in a series of back to back deals Celgene traded $450 million for a share of AstraZeneca’s ($AZN) PD-L1 therapy, acquired the Versant-seeded oncology biotech Quanticel Pharmaceuticals and extended its collaboration with Agios Pharmaceuticals ($AGIO)–a company in Northern Biologics’ position.
And Northern Biologics, like Quanticel, is a product of Versant’s penchant for build-to-buy startups, in which the firm partners with a larger drugmaker to seed a startup that may be acquired down the line. Versant has long been a pioneer among build-to-buy investors, striking deals with Roche ($RHHBY), Eli Lilly ($LLY) and others to launch startups born on the acquisition track.
So what are VC’s and investors looking for in biotec startups?
Venture capital firm that make significant financial and operational commitments to build early stage drug discovery companies and biotech startups have to base their selection on a number of indications based on their unique scientific platforms, research and potential to deliver multiple breakthrough therapeutics.
FierceBiotech regularly chronicle the largest venture capital deals in biotech. It’s a great way to keep an eye on up-and-coming companies with groundbreaking programs in their pipelines
So with the help of data from the National Venture Capital Association, they have compiled a list of the most active life science investors. The 17 firms on this list have done 14 or more deals since the beginning of 2008. The largest biotech investor–Domain Associates–has participated in 41 deals in the last year and a half.
The VC firms on this list include both life science-only firms as well as groups that invest in a variety of industries. In the process of the research, FierceBiotech spoke to a number of venture capitalists about what they look for when they choose to back a company. Despite the diversity of the firms, some clear trends emerged:
- All the VCs agreed that having a strong management team that investors trust is one of the most critical factors when choosing whether or not to financially support a new company. Many VCs even had a list of entrepreneurs or academics they’d worked with numerous times.
- Times are changing, and our healthcare system is likely to undergo a dramatic shift in the coming years. Less emphasis will be placed on incremental improvements to existing drugs. Rather, in order to have a successful drug program, biotech and pharma companies must develop game-changing therapeutics. VCs are taking this into account as they select their investments now; they’re most interested in funding companies with advancements that address unmet medical needs.
- While VCs are being selective with their money, the economic crisis hasn’t has a substantial negative impact on their activities. For one thing, biotech investors are in it for the long haul–they’re not very susceptible to short-term problems. In fact, biotech’s desperation for cash has led to better deal terms for VCs. And companies that do secure funding are using it wisely, since they can’t afford to waste money anymore. In many cases, the cream of the crop are able to raise funding while less promising ideas fall by the wayside.
So without further ado, take a look at this list of the most active biotech and pharma life science investors.
- Domain Associates
- HealthCare Ventures
- Polaris Venture Partners*
- MPM Capital*
- Alta Partners
- ARCH Venture Partners
- Flagship Ventures
- SV Life Sciences Advisers*
- Sanderling Ventures*
- Kleiner Perkins Caufield & Byers
- InterWest Partners*
- Sofinnova Ventures*
- Burrill & Company
- New Enterprise Associates*
- OrbiMed Advisors
- Quaker BioVentures
- Venrock Associates*
Early stage research also has a big part to play on finding prospects one such example doing the doing the rounds in the news recently is about a research study on a species of Brazilian wasp whose venom can kill cancer cells.
Wasp study has a sting in the tail for cancer cells
Brazilian Wasp Venom and VC Funding in Biotec Startups to Cure Cancer? maybe…
The venom of the Brazilian wasp Polybia paulista contains a powerful “smart” drug that selectively targets and destroys tumour cells without harming normal cells, a study has shown.
In laboratory tests, the poison has been shown to suppress the growth of prostate and bladder cancer cells, as well as leukaemia cells resistant to a range of drugs.
New research has now revealed the secret of the venom toxin, known as MP1. Scientists found that it blows gaping holes in the protective membranes surrounding tumour cells by interacting with fatty molecules called lipids.
The wasp protects itself against predators by producing the venom, which is known to contain the powerful cancer-fighting ingredient. A Biophysical Journal study published September 1 reveals exactly how the venom’s toxin—called MP1 (Polybia-MP1)—selectively kills cancer cells without harming normal cells.
MP1 interacts with lipids that are abnormally distributed on the surface of cancer cells, creating gaping holes that allow molecules crucial for cell function to leak out.
“Cancer therapies that attack the lipid composition of the cell membrane would be an entirely new class of anticancer drugs,” says co-senior study author Paul Beales, of the University of Leeds in the UK. “This could be useful in developing new combination therapies, where multiple drugs are used simultaneously to treat a cancer by attacking different parts of the cancer cells at the same time.”
MP1 acts against microbial pathogens by disrupting the bacterial cell membrane. Serendipitously, the antimicrobial peptide shows promise for protecting humans from cancer; it can inhibit the growth of prostate and bladder cancer cells, as well as multi-drug resistant leukemic cells. However, until now, it was not clear how MP1 selectively destroys cancer cells without harming normal cells.
Beales and co-senior study author João Ruggiero Neto of São Paulo State University in Brazil suspected that the reason might have something to do with the unique properties of cancer cell membranes.
In healthy cell membranes, phospholipids called phosphatidylserine (PS) and phosphatidylethanolamine (PE) are located in the inner membrane leaflet facing the inside of the cell. But in cancer cells, PS and PE are embedded in the outer membrane leaflet facing the cell surroundings.
The researchers tested their theory by creating model membranes, some of which contained PE and/or PS, and exposing them to MP1. They used a wide range of imaging and biophysical techniques to characterize MP1’s destructive effects on the membranes. Strikingly, the presence of PS increased the binding of MP1 to the membrane by a factor of 7 to 8. On the other hand, the presence of PE enhanced MP1’s ability to quickly disrupt the membrane, increasing the size of holes by a factor of 20 to 30.
“Formed in only seconds, these large pores are big enough to allow critical molecules such as RNA and proteins to easily escape cells,” Neto says. “The dramatic enhancement of the permeabilization induced by the peptide in the presence of PE and the dimensions of the pores in these membranes was surprising.”
In future studies, the researchers plan to alter MP1’s amino acid sequence to examine how the peptide’s structure relates to its function and further improve the peptide’s selectivity and potency for clinical purposes. “Understanding the mechanism of action of this peptide will help in translational studies to further assess the potential for this peptide to be used in medicine,”
Beales said the laboratory tests suggested that the molecule was harmless to healthy cells and therefore safe, but added: “Further work would be required to prove that.”
Nanofibers Carry Toxic Peptides Into Cancer Cells
Researchers have long known that certain peptides are capable of killing cells by inserting themselves into the cell membranes and disrupting normal membrane structure and function. Now, researchers at Northwestern University have learned how to deliver these cytotoxic peptides to tumor cells using self-assembling nanofibers that can slip into cancer cells and allow the toxic peptides to do their job from inside the cell.
The research team, led by Samuel Stupp and Vincent Cryns, published its work in the journal Cancer Research. Dr. Stupp is a member of the Nanomaterials Cancer Diagnostic and Therapeutic Center, a National Cancer Institute Center for Cancer Nanotechnology Excellence.
To create their nanofibers, the researchers first synthesized molecules called peptide amphiphiles. These molecules fold into sheet-like structures that have one water-seeking, or hydrophilic, side and one water-avoiding, or hydrophobic side. When mixed in solution, this peptide self-assembles into long, nanometer-thin fibers. When the cytotoxic peptide was attached to one end of the peptide amphiphiles, it ended up decorating the surface of the fiber.
When added to breast cancer cells, this construct easily entered the cells, while the cytotoxic peptide alone did not. The nanostrucutres also induced breast cancer cell death, while the cytotoxic peptide alone did not. One surprising finding was that the nanostructures triggered cell death more effectively in breast tumor cells than they did when added to normal breast cells, suggesting that the fibers themselves may have some selectivity for tumor cells.
This work, which is detailed in a paper titled, “Induction of Cancer Cell Death by Self-assembling Nanostructures Incorporating a Cytotoxic Peptide,” was supported in part by the NCI Alliance for Nanotechnology in Cancer, a comprehensive initiative designed to accelerate the application of nanotechnology to the prevention, diagnosis, and treatment of cancer.
The research was supported by the University of Leeds, the European Commission, the Sao Paulo Research Foundation, the Brazilian Council for Scientific and Technological Development, CAPES, and the EPSRC.
Medicine is entering a new phase in which cells will become living drugs
In 2013 a patient in Seattle fighting cancer, acute lymphoblastic leukemia, won the battle when the cancer was destroyed with a new type of treatment in which cells from his immune system, called T cells, were removed from his blood, genetically engineered to target his cancer, and then dripped back into his veins.
Although this was only the second person at Seattle to receive the treatment, earlier results in Philadelphia and New York had been close to miraculous. In 90 percent of patients with acute lymphoblastic leukemia that has returned and resists regular drugs, the cancer goes away. The chance of achieving remission in these circumstances is usually less than 10 percent.
Those results explain why a company called Juno Therapeutics raised $304 million when it went public in December, 16 months after it’s founding. In a coup of good timing, the venture capitalists and advisors who established Juno by licensing experimental T-cell treatments in development at Seattle Children’s, the Fred Hutchinson Cancer Research Center, and hospitals in New York and Memphis took the potential cancer cure public amid a historic bull market for biotech and for immunotherapy in particular.
Its IPO was among the largest stock market offerings in the history of the biotechnology industry.
The T-cell therapies are the most radical of several new approaches that recruit the immune system to attack cancers. An old idea that once looked like a dead end, immunotherapy has roared back with stunning results in the last four years.
Newly marketed drugs called checkpoint inhibitors are curing a small percentage of skin and lung cancers, once hopeless cases.
More than 60,000 people have been treated with these drugs, which are sold by Merck and Bristol-Myers Squibb. The treatments work by removing molecular brakes that normally keep the body’s T cells from seeing cancer as an enemy, and they have helped demonstrate that the immune system is capable of destroying cancer.
Juno’s technology for engineering the DNA of T cells to guide their activity is at an earlier, more experimental stage. At the time of its IPO, Juno offered data on just 61 patients with leukemia or lymphoma.
Juno is located in South Lake Union, a Seattle neighborhood dominated by Amazon.com, whose CEO, Jeff Bezos, was an early investor in the company.
Proof of principle, that’s what cases like the one above have provided. The studies are small, with no control groups, no comparisons, but also no other explanation than T cells for why the cancer disappears. “It’s proved that the T cell is the drug,” says Hans Bishop, a former Bayer executive who is the company’s CEO.
Bishop argues that medicine is entering a new phase in which cells will become living drugs. It is a third pillar of medicine. The pharmaceuticals that arose from synthetic chemistry made up the first pillar.
Then, after Genentech produced insulin in a bacterium in 1978, came the revolution of protein drugs. Now companies like Juno are hoping to use our own cells as the treatment. In the case of T cells, the tantalizing evidence is that some cancers could be treated with few side effects other than a powerful fever.