STARTUP companies in the immuno-oncology sector attracted just over $6 billion in venture capital investments in 2015 and so far in 2016, although the pace of investment appears to have slowed down considerably this year, according to a new report by investment analyst Tracxn.
Tracxn said that 2015 saw 130 rounds of investment worth $4.2 billion in immuno-oncology startups, companies involved in pharmaceutical and medical process research and development in cancer and serious immunological diseases. Through end-August, investment activity has slowed somewhat, with 81 rounds of investment totaling $1.9 billion directed to immuno-oncology startups so far this year.
Most of the investment activity was direct venture capital investment. Tracxn said “about 45” new companies emerged in 2015-2016 as a result.
The investment monitor noted that “seed stage” investments slightly increased in terms of number of investments, while early and late state investments declined slightly. Tracxn said that the average seed investment doubled in size to $3.5 million during the period, compared with the previous two-year period, which “perhaps reflected investor faith in this space despite a global funding slowdown.”
Five startup companies were able to secure funding rounds of $100 million or more during the period, which Tracxn said reflected the trend of larger average investments. The five companies were identified as Immunocore, which focuses on T-cell receptor-based drug development; Stemcentrx, a stem cell research lab; Gritstone Oncology, whose work mainly focuses on gene therapy; New Jersey-based Hengrui Therapeutics, and South Africa’s Zai Lab.
Stemcentrx was one of four startups that were acquired by larger companies since the beginning of 2016, Tracxn said, joining Scotland’s IOmet Pharma, Israel’s Applied Immune Technologies, and San Francisco-based OncoSynergy. The Stemcentrx deal was one of the largest pharmaceutical venture capital returns to date, paying off more than $1.7 billion to investors after AbbVie acquired it in April in a deal reportedly worth $10.2 billion.
In addition, there was one immuno-oncology company, the Beijing-based BeiGene, making an initial public offering in February this year.
Active investors in 2015-2016 included Orbimed, MPM Capital, Novo A/S, Alta Partners, and Novartis Venture Fund, Tracxn reported.