June 2024 Newsletter: Private Investments in H1 2024

Hello friends and colleagues,

The biotech industry is starting to regain its footing after facing a prolonged bear market, with venture investments normalizing to pre-pandemic levels. As we wrap up the first half of 2024, we would like to use this month’s newsletter to reflect on recent investment trends and highlight the top fundraisers so far this year.

Biotech Capital Markets Show Signs of Rebounding in Q1

According to data presented at BIO 2024, private U.S. biopharma companies raised approximately $4 billion in Q1. If this trend continues, the annual investment total may surpass last year’s $15 billion benchmark, which was an increase compared to the $12 billion - $13 billion raised in venture funding in 2018 - 2019. Additionally, new venture groups, like Goldman Sachs’ first life sciences fund, have emerged and established firms are raising substantial funds, indicating a renewed confidence in the sector.

Investor priorities have also shifted towards a more risk-averse profile, with a decrease in the volume of deals directed towards preclinical companies and a greater focus on clinical-stage companies with experienced management teams. Nonetheless, we saw the largest fundraises from two discovery platform companies, Xaira Therapeutics and Mirador Therapeutics, raising a question around how enthusiasm for platform technologies is currently evolving.

This risk-averse sentiment is also reflected on the IPO front, with fewer early-stage startups going public and a stronger preference for mergers, acquisitions, and partnerships as potential exit strategies. The broader economic environment, including the Federal Reserve's interest rate policies, has also influenced this dynamic, suggesting a cautious but optimistic outlook for biotech investment in 2024.

Largest Fundraisers from H1 2024

Xaira Therapeutics breaks the mold with $1 billion raise for AI-based platform

At the end of April, the AI drug discovery company emerged from stealth mode with $1 billion in funding, led by investments from ARCH Venture Partners, Foresite Labs, F-Prime, Sequoia Capital, Lux Capital, Lightspeed Venture Partners, and others.

Headquartered in the San Francisco Bay Area, Xaira aims to combine machine learning, data generation and therapeutic product development to build a platform for drug discovery focused on developing models to support protein and antibody design.

Mirador Therapeutics raised $400 million in Series A funding

The next-generation precision medicine company, focused on dermatological, respiratory and gastrointestinal diseases, secured the largest fundraise of Q1 with a $400 million Series A fundraise. Investments were led by ARCH Venture Partners, OrbiMed, Fairmount, Fidelity Management & Research Company, and Point72, among others.

Mirador’s proprietary drug discovery platform, known as Mirador360, uses genomic data and molecular profiling to create potential therapies that consider differences in patients' genes, environments and lifestyles.

Metsera emerges from stealth mode with $290 million

Riding the GLP-1 wave, weight-loss drug developer Metsera announced a $290 million fundraise in April. The seed / series A investments were led by ARCH Venture Partners, F-Prime Capital, SoftBank, Mubadala Capital, Newpath Partners, and other undisclosed investors.

Metsera aims to develop the next generation of obesity and metabolic disease treatments. The company’s lead asset, currently in phase 1 trials, is an injectable GLP-1 agonist with potential best-in-class duration of affect.

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As we look ahead to the second half of 2024, the biotech sector continues to show promising signs of recovery and growth. With substantial investment capital flowing into innovative clinical-stage companies and the ongoing rise of AI-driven drug discovery platforms, the sector remains dynamic.

Thank you for joining us this month as we highlight recent private investment activity. Stay tuned for more updates on emerging trends and transformative developments shaping the biopharma landscape as we continue to provide best-in-class services for strategic new product planning, corporate development, and R&D strategy.