Arsenal Biosciences, Inc.

Tim Hunt, CEO of the Alliance for Regenerative Medicine, provides welcome remarks at 2024 Cell & Gene Meeting on the Mesa. / Greg Slabodkin Tim Hunt, CEO of the Alliance for Regenerative Medicine, said Monday at the 2024 Cell & Gene Meeting on the Mesa that investments reached $10.9 billion in the first half of this year—outpacing 2019’s $9.8 billion total—but far below the pandemic peak. While the cell and gene therapy industry has been hit with investment headwinds since the high levels seen in 2020 and 2021, there are indications that a recovery might be in the offing, according to data presented Monday at the 2024 Cell & Gene Meeting on the Mesa by the Alliance for Regenerative Medicine. Investments of $10.9 billion in the first half of this year are already ahead of 2019’s $9.8 billion total, Tim Hunt, CEO of the Alliance for Regenerative Medicine (ARM), which hosts the annual conference, said in his welcome remarks kicking off the three-day meeting. Still, both numbers pale in comparison to the $19.9 billion and $22.7 billion in investments made in 2020 and 2021, respectively, with levels falling to $12.6 billion in 2022 and $11.7 billion in 2023. For the cell and gene therapy sector, it’s been a “very challenging” two to three years, Hunt said. “It’s been uniquely challenging for smaller organizations that are preclinical. It’s been challenging for platform companies. It’s just not been an easy environment.” Hunt pointed out that that the nearly $11 billion raised in the first half of 2024—which has “nearly eclipsed” all of 2023—primarily went to “later-stage companies” with advanced clinical trials and human data. “It’s a little bit of a tale of haves and have-nots in our sector,” Hunt said. “There is money out there. I think people know that. The problem is a lot of it is locked up and it’s not flowing in through VCs to early startups. There’s been a dearth of IPOs.” However, ARM is hopeful “that the gears will start to unlock a little bit more as we see interest rates come down and other things stabilizing,” according to Hunt. A New Normal, Cell Therapies on the Rise In a panel session on investing in cell and gene therapy at Meeting on the Mesa, David Lederman, managing director of capital markets at investment bank Chardan, agreed the sector is starting to see a little bit of a “thaw.” Jason Russell, managing director and global head of biotechnology at Morgan Stanley, made the case that the Federal Reserves’ interest rate cut in September “certainly has downstream implications for more risk-oriented assets and access to capital” in the cell and gene therapy space. “We’re definitely in recovery mode. Things feel a lot better than they did say in 2022 and 2023. Capital formation for later stage assets is really going well,” Russell said. “We’re making our way back to what’s hopefully a normal functioning market that can help support innovators and capital in this sector.” This mirrors trends seen in the broader biotech industry . Still, Mizuho Securities analyst Jared Holz told BioSpace last month that if industry observers were expecting a sudden gold rush of fundraising and IPOs as a result of the Federal Reserve’s recent rate cut, that’s unlikely to happen . “I don’t see the floodgates opening necessarily, because the last time that we were kicking out 50 or more IPOs a year, the broader sector was negatively impacted by that,” Holz said. “Be careful what you wish for. Too many IPOs in this space I think is actually a very, very meaningful negative for publicly traded equities.” At Meeting on the Mesa this week, Russell acknowledged that many IPOs is arguably “unhealthy” and “not conducive to a really well-functioning, long term market.” So far, he said, there have been 15 biotech IPOs in 2024, including Kyverna Therapeutics’ upsized $319 million IPO in February to support its pipeline of anti-CD19 CAR T therapy candidates. Scott Gottlieb, former FDA commissioner and partner at venture capital firm New Enterprise Associates, in a fireside chat at the conference said that the work around autoimmune diseases and CAR T therapies is “hugely exciting” to investors and could be at an inflection point. “In the next couple of years, I do think that some of the work with CAR T in the autoimmune indications looks so transformative that that’s going to capture a lot of popular attention,” Gottlieb said. Jefferies analyst Kelly Shi in a Monday deep dive analysis for investors wrote that in 2024 more than 20 CAR T programs have entered autoimmune trials with data readouts showing that CAR T therapies “could achieve clinical benefits across multiple autoimmune indications” as “preliminary data from leading programs have shown evidence of B-cell depletion and immune reset, supporting durable drug-free potential of cell therapies.” The bottom line, according to Shi: “CD19 CART’s potential to achieve drug-free remission remains an intact hypothesis to support clinical development for this drug class.” Overall, Hunt sees 2024 as the “breakthrough year for cell therapies” due to major advances. This has translated into sizable fundraises this year for cell therapy companies, including Capstan Therapeutics’ oversubscribed $175 million Series B financing and ArsenalBio’s $325 million Series C funding round last month, he said.

After a protracted funding slump, investment interest in biotech seems to be on the rebound beyond just Arch Venture Partners' efforts. On the heels of a $3 billion fund from Bain Capital Life Sciences, Arch Venture Partners is proving it can go toe-to-toe with the other investor, closing a VC fund of "more than $3 billion."The venture fund is Arch's 13th and will support the founding and buildup of early-stage biotech companies, according to a Sept. 26 announcement.   Though Arch didn’t get into detail about its goals for the new tranche of cash, the venture firm noted that beneficiaries of “Fund XIII” already include programmable cell therapy company ArsenalBio, inflammatory and fibrotic disease specialist Mirador Therapeutics, artificial intelligence drug discovery startup Xaira Therapeutics and Metsera, which just this week unveiled data on a new GLP-1 receptor agonist. AI and data-driven insights into biology will be key for the future of healthcare, Robert Nelsen, Arch co-founder and managing director, stressed in a statement.  "Arch is first and foremost a company builder; we foster innovation at scale to develop new technologies and medicines as rapidly as possible," Keith Crandell, managing director and Arch’s other co-founder, added in the firm’s release. "We remain incredibly excited by the pace of innovation and efforts to understand disease at a deeper level."Arch’s latest venture fund tops 2022’s “Fund XII,” which capped out at around $2.98 billion.Several of 2024’s largest private biotech financing rounds have come thanks in part to Arch’s investments in ArsenalBio, Xaira, Mirador and Metsera."We want to know who wants to build something big and stay with it," Arch’s Nelsen told Fierce Biotech earlier this year.  The big money round comes a few weeks after Bain Capital Life Sciences revealed $3 billion in commitments for its fourth funding round, with $2.5 billion from new and current investors and the remaining $500 million sourced from Bain’s partners and affiliates.“The fund will draw on BCLS’ multi-decade investment experience to invest scale capital globally in transformative medicines, medical devices, diagnostics and life sciences tools that have the potential to improve the lives of patients with unmet medical needs,” Bain said in a release at the time.Earlier this year, J.P. Morgan pointed toward a return to biotech growth, citing new venture investments, steady M&A deals and an increasingly widening IPO market. In the second quarter, biopharmas raised $7.6 billion in private equity financing across 107 investments, J.P. Morgan said in a July report.  

CHICAGO, Sept. 26, 2024 /PRNewswire/ -- ARCH Venture Partners today announced the closing of ARCH Venture Fund XIII, a venture capital fund with more than $3 billion to support the founding and growth of early-stage biotechnology companies. "After more than 38 years, the ARCH investment philosophy has been consistent: we bet on great science and great teams to build breakthrough companies. We believe AI and new data-driven insights into biology will help to enable a more preventive, curative and equitable healthcare system. ARCH intends to continue driving the healthcare revolution," said ARCH co-founder and Managing Director Robert Nelsen. ARCH founds and invests in early-stage companies that prevent, detect and cure disease. Fund XIII investments to date include ArsenalBio, Metsera, Mirador Therapeutics and Xaira Therapeutics. "ARCH is first and foremost a company builder; we foster innovation at scale to develop new technologies and medicines as rapidly as possible," said ARCH Managing Director Kristina Burow. "We are well-positioned to continue catalyzing the next revolutions in healthcare to benefit those who matter most: patients." "ARCH has a long history of identifying the top forward-looking trends in life sciences R&D and the individuals driving truly breakthrough scientific hypotheses," said ARCH co-founder and Managing Director Keith Crandell. "We remain incredibly excited by the pace of innovation and efforts to understand disease at a deeper level." Fund XIII follows the $2.975 billion Fund XII announced in June 2022. ARCH's Managing Directors include: Robert Nelsen Keith Crandell Kristina Burow Mark McDonnell Steve Gillis Paul Berns About ARCH Venture Partners ARCH Venture Partners creates and invests in groundbreaking life science and technology companies. The firm is a recognized leader in commercializing technologies developed at academic institutions, corporate research groups and national laboratories. ARCH invests primarily in companies it co-founds with leading scientists and entrepreneurs, bringing innovations in life sciences and physical sciences to market. For more information, visit . Contact: Morgan Warners FGS Global [email protected] SOURCE ARCH Venture Partners WANT YOUR COMPANY'S NEWS FEATURED ON PRNEWSWIRE.COM? 440k+ Newsrooms & Influencers 9k+ Digital Media Outlets 270k+ Journalists Opted In GET STARTED