Category Archives: VC-backed Biotech Returns

Data Insight: The Return Distribution Of BioPharma VC Financings
August 11, 2014

Return distributions in venture capital across different sectors have been a frequent source of commentary, and new data from Correlation Ventures provides further substrate for that theme. I’ve highlighted data from Correlation Ventures (CV) in the past, looking at top

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VC-Backed Biotech IPOs: Valuations And Virtuous Cycles
August 4, 2014

As everyone in biotech knows, the last eighteen months have been an unprecedented time in the public capital markets.   2014 is on track to become the best year ever for life science IPOs, topping both 2013 and 2000.  Last week

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Framing Up Capital Efficiency In Early Stage Biotech
July 17, 2014

Capital efficiency has become a mantra at Atlas, one shared by a number of other early stage biotech investors. It’s a term often repeated in discussions about building young companies, and yet it has become clear that there’s no consistent

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Pushing Forward With Collaborative R&D Models In Biotech: Roche-Spero And Biogen-Ataxion
April 9, 2014

With today’s announcement of Roche’s deal with Spero Therapeutics LLC (here), and last month’s news regarding Biogen’s deal with Ataxion (here), we’ve added further momentum to our strategy of working closely with larger BioPharma partners to create innovative “external R&D”

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Tradeoffs and Timing: IPO vs. M&A Decision Making in Biotech
April 2, 2014

In light of the continued interest in biotech IPOs by the capital markets, there’s probably not a venture-backed biotech boardroom that hasn’t been discussing the merits of going public. Whether warranted or not, taking a company public via an IPO

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Immuno-Oncology Startup CoStim Pharmaceuticals Acquired By Novartis
February 18, 2014

Today Novartis announced its acquisition of CoStim Pharmaceuticals, a young biotech company focused on next generation approaches in the exciting immuno-oncology field (here).  Their oncology capabilities and commitment to anti-cancer immune mechanisms made them an ideal partner for us at

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Biotech IPO Returns: Great, Good, And Not So Good
February 10, 2014

The biotech IPO bonanza appears to be continuing into 2014, with over thirteen offerings already this year.  We’re just now completing the busiest two week period in biotech IPOs ever.  Another dozen or so companies appear likely to price IPOs

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The Arteaus Therapeutics Story: R&D Externalization with Eli Lilly
January 13, 2014

Today, we are excited to announce that we’ve successfully exited Arteaus Therapeutics to Eli Lilly (see announcement here, here).  It’s fair to say it’s been a superbly executed example of R&D externalization and a win–win for Lilly and Arteaus. Before

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Perspectives on VC-Backed Biotech: Looking Backward & Forward
January 3, 2014

Tis the season for reflecting and predicting, so I figured I’d follow the custom and share some of my thoughts about the state of biotech in 2013 and the year to come. Reflections on 2013. The Biotech IPO Returns.  This

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2013’s Untold Biotech Story: Success Of The 2011-12 IPO Class
December 12, 2013

The past year has certainly been the most exciting one for Biotech IPOs since 2000, with dozens of new offerings and compelling therapeutic narratives.  But focusing on these new IPOs misses an equal if not more exciting story: the significant

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Correlation’s Fresh Look At Venture Capital Returns
November 18, 2013

The broad underperformance of the venture capital asset class during the past decade is widely discussed; there’s a frequently-cited assertion that U.S. venture returns trailed the overall public equity stock market in the 2000s. Few if any published analyses have

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Biotech IPOs: The Exit Challenge As Lockups Expire
October 31, 2013

Six months ago the biotech industry was on the verge of a sizzling season for IPOs, and since then, on average, we’ve seen one new biotech IPO per week.  Valuations of many of these offerings have been impressive, and this

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Winners’ Circle: New Insights Into BioPharma Venture Returns
September 17, 2013

Successful deals in venture capital take on a life of their own, especially the rare massive outlier return.  Unfortunately for venture capitalists, Facebooks and Twitters are very rare. Understanding the nature of “winners” requires a good grounding in what a

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A View Through An Open Window For Biotech IPOs
July 9, 2013

For the first time in over a decade, there’s real talk about an open IPO window for biotech companies.  The NVCA’s second quarter update highlighted that venture-backed biotech outpaced all other industry sectors in the number of IPOs and the

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Debunking Myths About Biotech Venture Capital
May 22, 2013

There are lots of myths about venture capital and biotech in particular, as noted previously on this blog.  Many of these myths are deeply held beliefs about returns, what works and what doesn’t, and the state of the industry.  Told

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VC-backed Biotech Holding Periods: Tortoise or Hare?
May 8, 2013

Biotech just takes too long, especially when compared to the overnight success of technology ventures, or so the oft-cited criticism of venture-backed biotech’s perceived longer holding period goes. Despite being a well-accepted belief  held by most venture professionals, LP’s, and

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Unhealthy Prognosis for Venture-Backed Diagnostics
April 26, 2013

Personalized medicine and diagnostics are undoubtedly critical to the delivery of better healthcare in the future: getting the right drug to the right patient at the right time.  In theory, these therapy-guiding diagnostics should reduce the cost of healthcare while

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Preclinical Biotech Structured Deals: Reflections on 2013′s Solid Start
March 1, 2013

Several preclinical-stage biotechs have opted for the early Pharma structured buyout as their exit path in recent weeks: Resolve Therapeutics with Takeda, Zacharon with Biomarin, RQx Pharma with Genentech, and Lotus Tissue Repair with Shire. Here are the quick takes

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Biotech M&A in 2012: The Good, Bad, and Ugly
January 30, 2013

The numbers are in on the 2012 Pharma/Biotech M&A performance, at least according to our friends at HBM Partners.  They’ve released another well-annotated deal report and database. The quick summary from a venture-backed biotech perspective: it was a good year

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The Entrepreneurial Diaspora Enabled By Biotech M&A
December 18, 2012

The recycling of equity capital through realized returns is a critically important element of biotech investing.  When public biotech companies get bought, like Genentech by Roche, or smaller deals like Cougar by J&J, a large number of biotech-focused equity funds

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Gravity, Biotech Returns, and Why The Median Matters
November 25, 2012

Many venture-backed companies assume they can escape the gravity of historic valuation ranges, and an anecdotal few may accomplish the feat.  But figuring out how to live within its probabilistic reality is an important element of successful venture portfolio construction. A thesis

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Data Insight: Venture Capital returns and loss rates
November 7, 2012

Much of the public dialogue about venture capital returns is based more on myth than fact, which reinforces inappropriately limited views of relative sector attractiveness, underlying risk profiles, and the “business models” that work in venture.  A big part of

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Biotech IPOs Are Back! Maybe.
October 16, 2012

Two recent offerings, Kythera and Intercept, both ripped out of the gates with 20% rallies above their offer price last week.  A flood of new S1 filings is to be expected.  With all that inventory out there of emerging private

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New Data on Venture Capital Returns: Exits Are Indeed Improving
October 3, 2012

Correlation Ventures, a new analytics-driven venture firm, just came out with some interesting data on US venture capital returns over the past decade. Instead of taking a “birth” vintage approach to returns, which is the way venture fund vintages and

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Biotech M&A Earnout Payments, Data Redux
September 12, 2012

Earnout deals are back in the news with an interesting report from Shareholder Representative Services, or SRS, a firm who specializes in working for the selling party’s shareholders to follow up post-acquisition to ensure that escrows are paid, diligence is

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Biotech’s Capital Intensity Challenge: A Post-Mortem on 2007’s Biggest Deals
August 29, 2012

“Raise all the money you can whenever you can, and then raise some more”.  “The more a company raises, the more successful it is”.  Resumes boasting about how much an executive has raised in their prior companies.  These sentiments are

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Reflections on Oncology’s Recent Biotech IPOs: CLVS, MACK, & TSRO
June 28, 2012

Three late stage oncology deals have made it through the IPO gauntlet in the past six months: Clovis Oncology in November 2011, Merrimack in March 2012, and just yesterday Tesaro.  Almost all came out of their offerings unscathed, unlike most

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Biotech M&A: Quietly delivering returns in 2012
June 19, 2012

Time and again, life sciences VC deals have been outscoring their better-capitalized, super-hyped and oft-praised colleagues who do deals in the tech side of the asset class. – Jonathan Marino in a PE Hub Post titled “Quietly, VCs in Life

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Not-so-Breaking News: The VC Model Needs Retooling
May 15, 2012

“We Have Met the Enemy… And He is Us” is the very fitting title of a recent report on the state of the VC market with a focus on the GP-LP relationship.  This thoughtful and thankfully analytical report highlights a

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Biotech Past, Biotech Present: Reflections on the IPO Window of 1991-1994
May 2, 2012

Twenty years ago the biotech world was in the midst of one of the best IPO windows in its history.  Nearly a hundred biotech companies went public from 1991-1994, including a number of the great companies that have become household

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Biotech VC Returns: Diversified Funds vs. Healthcare-only Funds
April 9, 2012

Over the past decade biotech investments made by diversified venture capital firms have outperformed those by healthcare-focused firms.  Its unclear why the difference exists, but the historical data suggest it’s a striking differential. Examining the NVCA Benchmarking Database powered by

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The Biotech Venture Capital Math Problem
March 15, 2012

Everyone has heard of the monster returns to some venture funds from high-flyng social media and technology companies: Facebook’s potential 800x for Accel, Google’s 350x for KPCB and Sequoia, Zynga’s 100x+ for Union Square, Foundry, and Avalon.  These single big

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Paying Attention to Biotech M&A Earnout Payments
February 22, 2012

In recent years, acquisitions of early stage private biotechs have frequently included an upfront value coupled with significant future milestone payments. These earnouts resemble the “biobucks” common to product licensing deals: stretching out over 5-10 years, they get ravaged by

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Avila Therapeutics Strikes A Covalent Corporate Bond With Celgene
January 26, 2012

Today Celgene announced the acquisition of Avila Therapeutics for $350M upfront and up to $575M in future milestones.  Congratulations to the Avila team!  For those of us involved in the story, we certainly think Celgene’s got itself a great deal.

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Venture-Backed Biotech’s 2011 M&A Exits Outpaced Both Investments and Fundraising
January 16, 2012

It’s certainly not Breaking News that M&A deals are an important source of liquidity in biotech VC today.  But last year did mark an important milestone for biotech over the past few years: in 2011, the capital returned to investors

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Risky Business: Late Stage vs Early Stage Biotech
November 18, 2011

Last week, late stage biotech Alimera blew up after the FDA sent it a Complete Response Letter (CRL) rejecting its Iluvien product for eye diseases.  The stock is off 80%.  This was supposed to be a derisked, late stage investment

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Chicken Little and Life Science Venture Capital
November 1, 2011

The sky is falling.  The sky is falling.  Seems like every day there’s another piece of news about the drop in Life Science venture capital (and here), with bouts of flagellation around each new quarterly press release from NVCA/PwC MoneyTree, Dow

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Early Stage Biotech Financing: Fewer, Leaner, and Better?
October 2, 2011

With lots of venture investors fleeing early stage biotech over the past few years, many have questioned where the next vintage of great startup companies will come from.  This theme was touched on a few weeks ago in my post

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Favorable 1H2011 Biotech M&A Trends
August 11, 2011

Our friends at HBM Partners just published their quarterly Biotech/Pharma M&A report.  Its got some good nuggets of data in it about 1H2011. Although its hard to think about in the midst of the Great August Rollercoaster in the markets,

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Mythbuster: Does Tech have a faster time to exit vs Biotech?
August 9, 2011

A few weeks ago I wrote a pair of blogs comparing Tech vs Life Science venture capital backed investments: one was on returns in the 2000′s where LS beat out Tech investing (highlighting a Nature Biotech article Bijan Salehizadeh of Highland Capital

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