The Biotech Startup Class of 2013: Don’t Worry, It’s a Short List

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much smaller tranches of financing when I checked their filings in the SEC’s EDGAR database.

And to be sure, I am hearing promises that the list will grow with a few more newsworthy biotech startup financings before Christmas. If these things materialize, I will update this chart in coming weeks so that it can serve as a reference for all of 2013.

Lastly, I should note that when I scrubbed through the Thomson Reuters data on first-time financings, I was struck by how inflated the reported number of 102 first-time financings appears to be. Several of the companies counted shouldn’t qualify for a variety of reasons. Either it wasn’t their first financing, the first financing was much smaller than reported, or the company isn’t even a true life sciences entity. My review eliminated seven of the 32 biggest financings (22 percent), and I didn’t even bother to go really deep into the weeds of the $1 million financings.

With that, here are the 45 members of the “newsworthy” biotech startup class of 2013. As always, if I’ve overlooked any companies that meet the selection criteria, please let me know at [email protected] or @ldtimmerman on Twitter and I’ll be sure to update the chart.

CompanyLocationWhat does it do?Who invested?AmountSource
Precision for MedicineBethesda, MDDrug development servicesJ.H. Whitney, Oak Investment Partners$150mThomson Reuters
Juno TherapeuticsSeattleCancer immunotherapyArch Venture Partners, Alaska Permanent Fund$120mXconomy reporting (updated 12/4/13)
Spark TherapeuticsPhiladelphiaGene TherapyChildren’s Hospital of Philadelphia$50mPress release (updated 12/13/13)
Jounce TherapeuticsCambridge, MACancer immunotherapyThird Rock Ventures$47m (likely smaller bThomson Reuters
Editas MedicineCambridge, MAGene editingPolaris Partners, Third Rock Ventures, Flagship Ventures$43mXconomy reporting (11/25/13)
GenSight BiologicsParis, FranceGene therapy for ophthalmologyNovartis Venture Fund, Abingworth, Versant Ventures, Index Ventures$41.3mpress release
ObsEvaGeneva, SwitzerlandDrugs for pre-term laborSofinnova Partners, Sofinnova Ventures, Novo A/S, MS Ventures$34.5mpress release
Audentes TherapeuticsSan FranciscoGene therapy for rare diseasesOrbiMed Advisors, 5AM Ventures, Versant Ventures$30mThomson Reuters
Seragon PharmaceuticalsSan DiegoCancer drugsvenBio, Topspin Fund, Aisling Capital, OrbiMed Advisors, The Column Group$30mThomson Reuters
PulmocideLondonInhaled therapies for respiratory diseasesImperial Innovations, SV Life Sciences, Fidelity Biosciences, Johnson & Johnson$27.4mBioCentury
CydanCambridge, MAOrphan drug startupsNEA, Pfizer Venture Investments, Alexandria Venture Investments, Lundbeckfond Ventures, Bay City Capital$26mpress release
Envisia TherapeuticsResearch Triangle Park, NCPolymer drug deliveryCanaan Partners, NEA, Pappas Ventures, Morningside Technology Ventures, Wakefield Group.$25mpress release
ApexigenBurlingame, CAAntibody drug development for cancer, inflammationAmkey Ventures, WSR Capital, China Development Industrial Bank, Themes Investment Partners, and Sycamore Ventures.$20mXconomy reporting (updated 12:45 pm PT)
Armo TherapeuticsRedwood City, CAsCancer immunotherapy, fibrosis, cardiovascular diseaseKleiner Perkins Caufield & Byers, OrbiMed Advisors, DAG Ventures$20mXconomy reporting 11/25/13)
BioClin TherapeuticsSan Ramon, CAAntibody drug for a rare genetic orphan disease (not disclosed) and cancerNovo A/S$20mXconomy reporting (updated 12:30 pm PT 11/19)
Allecra TherapeuticsLorrach, GermanyAntibioticsEdmond de Rothschild Investment Partners, Forbion Capital Partners, EMBL Ventures$19.6mpress release
Solstice BiologicsSan FranciscoRNA interferencevenBio, Aeris Capital$18mpress release
Effector TherapeuticsSan DiegoCancer drugsU.S. Venture Partners, Abingworth, Novartis Venture Funds, SR One, Astellas Venture Management, Osage University Partners and Mission Bay Capital$17.4m (press release says $45m)Thomson Reuters
Sideris Pharmaceuticals
BostonIron-chelating drugMPM Capital, Osage University Partners, Hatteras Venture Partners, Novartis$17mSEC filing (updated 10:45 am ET)
Allergen Research Corp.San Mateo, CAOral immunotherapy for peanet allergiesLongitude Capital, Food Allergy Research and Education$17mpress release
BiodesyBurlingame, CAReal-time analysis of protein function5AM Ventures, Pfizer Venture Investments and Roche Venture Fund.$15mpress release
Tacurion PharmaNew YorkDrug for frequent urination at nightInterWest Partners, Sutter Hill Ventures and Astellas Venture Management$15mThomson Reuters
NextCode HealthCambridge, MAGenomic data interpretation/diagnosisArch Venture Partners, Polaris Partners$15mpress release
ArvinasNew Haven, CTDrug developmentCanaan Partners, 5AM Ventures, Connecticut Innovations and Elm Street Ventures$15mpress release
Labrys BiologicsSan Mateo, CAAntibody drug for migrainesvenBio, Canaan Partners, InterWest Partners, and Sofinnova Ventures.$14.6m (Jan. 3 press release said $31m)SEC filing
Fractyl LaboratoriesWaltham, MAMedical devices for chronic diseasesBessemer Venture Partners, Domain Associates$14.4mThomson Reuters
Amphivena Therapeutics Heidelberg, GermanyDrugs for blood cancersMPM Capital,Aeris Capital, Affimed AG.$14mThomson Reuters
X01 Cambridge, UKAnticoagulant therapyIndex Ventures$11mpress release
Middle Peak Medical Palo Alto, CAMitral valve heart deviceWellington Partners, Seventure Partners, High-Tech Gruenderfonds, BioMedInvest II, Edwards LifeSciences.$11mpress release
Scanadu Mountain View, CAPersonal health electronics/equipping smartphones for health monitoringRelay Ventures, Tony Hsieh’s VegasTechFund, Jerry Yang’s AME Cloud Ventures$10.5mpress release
Calorics Pharmaceuticals Waltham, MAYeast-based drug discovery for calorie-restriction/diseases of agingPolaris Partners, undisclosed investor$10.2mThomson Reuters
CoStim Pharmaceuticals BostonImmunotherapy/antibody drugs for checkpoint inhibitionNot disclosed. But board has members from Atlas Venture, MPM Capital, J&J Development Corp.$10mSEC filing
Syros PharmaceuticalsWatertown, MACancer drugsArch Venture Partners, Flagship Ventures$10mSEC filing
Loxo Oncology New YorkCancer drugsAisling Capital, OrbiMed Advisors and an undisclosed investor.$10mThomson Reuters
Sitari PharmaceuticalsSan DiegoDrugs for celiac diseaseAvalon Ventures, GlaxoSmithKline$10mpress release
Channel Medsystems San FranciscoMedical technology for heavy menstrual bleedingAperture Venture Partners LLC, Boston Scientific, DFJ Incube Ventures, Scientific Health Development Ltd,Undisclosed Investor$9.8mThomson Reuters
ImmunGene Thousand Oaks, CACancer drugsAlly Bridge Group$9mpress release
ScioDerm Raleigh, NCTopical skin drugMorgenthaler Ventures, Technology Partners$9mThomson Reuters
InformedDNA St. Petersburg, FLGenetic counselingMPM Capital, other undisclosed investors$7.7mThomson Reuters
New Leaf Symbiotics St. Louis, MOPlant bacteria-derived productsRockport Capital, Open Prairie Ventures, Pangaea Ventures, and several individuals.$7mThomson Reuters
Arcturus TherapeuticsSan DiegoRNA interferenceIndividual investors$6.3mXconomy reporting
Semnur Pharmaceuticals Mountain View, CANon-opioid drugs for back painNot disclosed, but board has members from Vivo Capital, Canaan Partners, and Frazier Healthcare Ventures$6mSEC filing
Dimension Therapeutics Cambridge, MAGene therapy for rare diseasesFidelity BiosciencesNot disclosed, but more than $5mXconomy reporting
Alector San FranciscoAlzheimer’s drugsPolaris Partners, OrbiMed AdvisorsNot disclosed, but more than $5mXconomy reporting
Sofie Biosciences Culver City, CANew PET imaging technologyTata Industries, MRM Capital, Cycad Group.$5mpress release

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8 responses to “The Biotech Startup Class of 2013: Don’t Worry, It’s a Short List”

  1. Barbara Nelsen says:

    Interesting article, but as you point out early-funding is now the domain of alternative investors, philanthropics, non-profits and super-angels. The list of exciting new biopharma companies is long, if you look to who has raised greater than $5M outside of VCs. In 2012, angels invested a total of $1.1 billion in 783 deals (primarily in “first fundings”), with 27% of that invested in the healthcare/life sciences sector.
    National chapters, larger investment pools, sophisticated investment
    strategies, syndications with other angel funds, and an integrated
    single-source application has made it significantly easier for angels to provide funding at higher levels than historically done, and through multiple rounds of financing. In addition, they are syndicating other investor categories. It’s time to rethink how we access the landscape of new and noteworthy biotechs.

  2. Carlos Danger says:

    I think the title of the article should more aptly be “The Biotech Startup Class of 2013: Worry, it’s a short list”.

  3. Carlos — I do think it’s a concern that so few high-impact startups are getting started. I hope it’s just a down cycle, because if it’s a long-term trend, then the whole industry will be in bigger trouble than it already is.

    Barbara — many of these companies listed above have gotten money from angels as well as VCs. Can you share some of the exciting first-time biotech financings of $5m+ in 2013 that I’ve overlooked? I’m happy to update the list if you have more names to add.

  4. @ben_lack says:

    You do realize your annualized rate is well (136) is well within the peak range, right?

  5. Ben — No, the annualized number of first-time financings is not even close to the peak range. The numbers from NVCA/Thomson Reuters show we are on track to see about half as many first time financings as in the peak years of 2006-2007. Those peak years saw 270-275 first time life science financings, and we are on track for roughly 130 first-time financings this year.

  6. This dynamic bodes well for future returns in early stage venture creation going forward.

  7. Muni says:

    You Said “As I did last year, I spent some time this week reviewing databases and asking a dozen VCs from the U.S. and Europe to come up with a list of the important biotech startups of 2013. For the purpose of this exercise, I defined a “newsworthy” biotech startup as one that has a big idea, a credible management team, and one that got at least $5 million from a first-time financing in 2013. I set $5 million as the cutoff, because it weeds out a lot of poseurs, yet it sets a pretty low bar for inclusion. It takes at least $5 million to do an even halfway substantive manufacturing run for a new protein drug candidate to begin clinical trials. It’s not much money”.

    ——————————————
    My reply
    “What you define “Newsworthy” seems to me not at all that worthy. If you have that much money, there would be millions of start ups in Biotech or any other field. The most notorious problem with starting a business of any kind is money, and that is even more harder for Biotechnology because one needs a lot more money. To start a BioTech with $5 Million in hand is pretty lame and unrealistic, who will have that much money. Most banks are run by thugs and they do even lend small amount like $100-250K, you are talking about 5 Million. I can guarantee you that most of those so called drug companies started with small amount and with their hard work and steady build up brought in more money. What is news worthy is a solid plan and good people behind the idea, the rest can be worked in a timely fashion, if money is your criteria for a small business/start up or a Biotech start up, there would be no new companies for another 100 years.

    I can guarantee you that with 1 Million, I can bring up one of the finest Biotech companies that could grow into challenge a larger multi million companies……that would be more news worthy. Writer like you must project realistic and optimistic views, and write to those thuggish banks like Wells Fargo, Chase and others to lend to talented people, things will change and our nation can improve from this economic and other disabilities that is facing now”.