Novartis recently announced the acquisition of Mariana Oncology, an emerging biotech focused on advancing a radioligand therapeutics platform, for up to $1.75 billion in upfronts and future milestones.

The capstone of its three short years of operations, this acquisition represents the second largest preclinical M&A deal in history, and the largest ever completed by Novartis.  It also represents a shift in radioligand therapy deal activity: a true platform acquisition, rather than one focused on a late-stage asset.

Mariana’s acquisition and the incredibly exciting radioligand therapy (RLT) space has been covered extensively elsewhere (here, here, here), but we thought sharing a few of the key people-related themes worthwhile.

This deal reinforces the oft-cited axiom in venture investing that finding and backing great teams is critical to success, and a big part of that is leveraging deep relationships across the ecosystem.

Let’s start with CEO-Founder Simon Read, who has now joined that rarefied air of serial entrepreneurs who’ve successfully had more than just a lucky billion dollar singleton; Simon was the CSO at Ra Pharma, which was acquired for $2.5B by UCB Pharma back in October 2019 (here). We had Simon on our “PeopleFlow” list immediately following that acquisition, and by the end of 2019 we were actively recruiting him. Fortunately for Atlas, he started as an Entrepreneur-in-Residence (EIR) in the spring. In fact, Simon was one of our first “virtual EIRs” to start during the early days of the COVID lockdown. For the initial six months or so, Simon worked across multiple Atlas companies, including advising Vigil, Q32, Third Harmonic, and others.

In the fall of 2020, Simon began working closely with my partner Kevin Bitterman and Atlas’ Jernej Godec, who spent the prior year beginning to formulate a thesis around radiopharmaceuticals, an effort termed “Project Curie”.  A critical component of this thesis had become the belief that low molecular weight ligands, such as macrocyclic peptides like those Simon had helped discover and develop at Ra, would be a key enabler of radioligand pharmacology.  Simon was quick to recognize the potential opportunity in this space and began working to strengthen and refine the nascent strategy. To support the effort, we also brought on Sandy Mong from BridgeBio to work as an EIR with Simon on the project.  The final startup pitch to the partnership was in April 2021, and Project Curie was seeded on May 3, 2021 – propitious timing, as it was exactly 3 years to the day that Novartis closed its acquisition of the company.

Initially, we partnered with Dan Becker and Christine Borowski of Access Industries (with whom we’ve done several deals with) on fleshing out the plans for the seed investment, both of whom were exceptional partners in helping pull it all together.  In particular, Christine and Jernej were an invaluable duo for Simon to lean on, in part because they had previously worked together at Appletree. They were both instrumental in the founding of the company and its early plans, especially during the 18+ months that Curie/Mariana incubated in the Atlas offices from mid-2021 until February 2022.

In Atlas’ April 2021 seed investment memo, crafted with Simon and Access, the team spelled out much of the vision for what made Mariana a success: the critical platform enablement that would establish Mariana as a leader in this emerging field, as well as the compelling target opportunity with the initial lead program (now called MC-339) in small cell lung cancer. Great initial target selection is not only important for advancing a pipeline, but also for early platform development.

Shortly after our seed investment, we further strengthened the broader syndicate by combining forces with our friends at RA Capital, Josh Resnick and Laura Tadvalkar, who were working on a NewCo with a similar focus. Notably, CSO Alonso Ricardo, who was an EIR at RA Capital, had previously worked alongside Simon Read at Ra Pharma. And Josh was also previously a Venture Partner at Atlas, and is a good personal friend with many of us at Atlas as well. It was very much like bringing the band back together!

Bernard Lambert, CTO of Mariana, was also a key early hire, joining about a year into the journey from Telix Pharma, a targeted radiopharmaceutical player. Bernard literally has more years of radiopharm experience than probably anyone on the planet, having worked extensively in the field for 24 years, and was a key enabler for the technology. Like most new tech platforms, integrating deep domain experience – including scars and grey hair from prior learning cycles – is critical to success.

Mariana’s COO/CFO Linda Bain was the final member of the senior leadership team to join, and helped scale the company into its $175M Series B raise last fall, in preparation for a potential path to an IPO. Linda came to Mariana from Codiak Biosciences, where she was the CFO for seven years, and helped lead their 2020 IPO. Widely regarded as an exceptionally talented leader, we tried hard for several years to recruit Linda. Thanks to the concerted effort of the entire Atlas team, and in particular Andrea DiMella (our head of talent), we were able to help her land at Mariana.

One of the many recruitment activities that helped: Linda ran the Reach The Beach relay with us in Sept 2022 and was stuck in a van with me for 30+ hours. She may have said yes to joining an Atlas startup just to escape future time in the vans! Funnily enough, Simon also ran RTB with us, back in 2021. Running is the new golf, as we like to say. This highlights another axiom in the venture business: finding unique ways to build deeper community pays dividends over the long run.

As for all emerging biotechs, BD is an ever-present activity – talking to partners and keeping them up to date.  That said, the BD process that culminated with this acquisition really kicked off in earnest last fall as the story came together for the Series B, and we had line of sight for MC-339 entering the clinic. At our “Atlas Venture Retreat” in November 2023, interactions between Linda Bain and Shiva Malek, head of oncology research for Novartis, were key in setting up the BD dynamic in early 2024. The RLT space couldn’t have been hotter, with an incredible wave of M&A happening in parallel with Mariana’s discussions: RayzeBio acquired by BMS, Point by Lilly, and more recently Fusion by AstraZeneca.

While many parties were interested, Novartis stood out for its conviction around RLT (including its existing marketed portfolio of Lutathera and Pluvicto) and our confidence in their ability to carry forward the team and platform into the clinic. In late January, following a call we had with Novartis’ Ronny Gal and Susanne Kreutz about several ongoing dialogues in the portfolio, Novartis expressed their interest in moving forward with an acquisition to both Simon and Atlas. Our partners at Centerview helped finalize the deal – further strengthening their incredible market share in the >$1B deal category: they’ve done at least 55 M&A deals greater than $1B since 2019, more than the next nine advisors combined.

As we close this chapter of what we hope is a much longer Mariana Oncology story, we’d like to thank the entire CurieTx/Mariana team that helped guide this over the past 3-4 years – and all those in the broader ecosystem that helped with its success.

It’s always all about relationships and people – and, of course, the energy those interactions emit!

Venture creation in biotech is witnessing a sustained contraction. After the pandemic bubble’s over-indulgence, the venture ecosystem appears to have reset its pace of launching new startups.

According to the latest Pitchbook data, venture creation in biotech hit its slowest quarterly pace in eight years during 1Q 2024.  With just over 60 new biotechs raising their first round of financing, the sector’s company formation activity has slowed 50-60% from its historic peak in 2021.

Overall, this contraction is a strong positive sign of healthy discipline, and should be good for the sector’s mid- and long-term prospects.  Back in April 2023, in the midst of the second year of the market pullback, I shared some reflections on why it was likely to be “for the better.”  At the risk of revisiting those points, here are a few reasons for why I still believe this contraction in venture creation is a healthy dynamic for the sector:

First, venture creation is hard to do well, and even harder at scale. Beyond simply backing great science (separating the wheat from the chafe), setting a company up properly is critical, and early choices can get locked into the DNA of the company.  I’m often reminded of Peter Thiel’s law: “A startup messed up at its foundation cannot be fixed.”  Back in 2013, I opined on this concept and many of the pitfalls highlighted around messing up venture formation remain salient today: unreproducible science (or poor target selection), inexperienced founders/”founder-itis”, poor Board governance, unwieldy syndicates, odd founding agreements, off-market capitalizations, etc… These are all no less relevant today than in the past, and in the pandemic period of irrational exuberance for big science many startups incorporated lots of these mutations into their founding DNA. Some continue to do so today, unfortunately, but there appears to be less of it happening.

Second, great teams of truly experienced leaders are scarce.  Catalytic executives, rather than stoichiometric ones, can change the trajectory of startups but are in very short supply.  Some grey hair is often, although not always, important. Fundamentally, even during tighter markets like today, great talent is always a very constrained resource, and spreading it too thinly across too many companies isn’t good for the ecosystem. Great scientists need great business partners, and vice versa, in order to be effective leaders in biotech – which means that concentrating the scarce high-quality talent in fewer companies will collectively be a good thing for the sector.

Third, with the proliferation of startups, we’ve seen incredible crowding in hyper-competitive therapeutic categories and modalities. This has long been a feature of biopharma (see 2012 and 2016 posts on oncology and immune-oncology, respectively), but has been exacerbated by the creation of so many new companies. Further, this lemming challenge has also moved well beyond oncology – think of all the “not-so-fast follower” autoimmune programs or metabolic disease stories. While it may help shake out some incremental advances for the therapeutic armamentarium, this dynamic also clearly creates inefficiencies and waste – both in terms of capital deployment, but also for patients’ engagement and clinical trial activity.  Further, the competitive intensity in certain areas makes the “clinical do-ability” too challenging, even if those drugs could likely be beneficial. Fewer startups over time should ameliorate this crowding dynamic to some extent.

Fourth, the venture exit environment circa 2027-2030 for the new crop of early stage startups being created today will likely have structural supply/demand elements more favorable than the backdrop in recent years. With venture creation activity peaking in 2020-2022, the sector was awash in too many startups – much like the tech VC sector a few years back.  In macroeconomic terms, a glut of startup equity (over-supply) in the face of fixed demand (M&A), or less demand (IPOs), means an unfavorable pricing dynamic. I explored this in a different phase of the biotech venture cycle a decade ago, but the themes are still relevant (in the opposite direction) for describing the recent and challenging exit environment. With fewer startups being created, the supply/demand balance should revert to a more favorable macro bias in the coming years (once the pig has been digested). This, of course, is only a comment on ecosystem “flux” dynamics, not all of the other potential policy and pricing headwinds.

One critical caveat to these positive observations: our job is to bring medicines to patients.  A more constrained startup world means fewer bench-to-beside efforts will be embarked on by the sector as a whole, which could leave innovative new medicines stalled in laboratories around the world. We need to be mindful of this challenge, and ensure that the best ideas (rather than just the best connected ideas) are getting advanced by the sector.

It’s also important to note that my reflections above, and the data, are focused on the number of new startups being formed. Absolute funding levels are important too.  While also off from their peaks in 2021, there’s still significant aggregate venture funding flowing into the startup world by any historic metric. In the past couple months, we saw the first $1B initial financing in biotech with the launch of Xaira, as well as large first financings from Metsera ($290M) and Mirador ($400M).  Despite these mega-round financings, though, the median first financing remains in the $5-10M range, where it has been for years.

Stepping further back to the asset class, this contraction should be viewed positively by LPs, who invest into venture funds, and the VCs they back, as more discipline should translate into better returns in the long term: constrained resources should improve the average health of the venture herd.