Data from Evaluate show that biopharma venture capital investment fell from $7.95bn in Q2 to $6.59bn in Q3, but both outpaced every quarter in 2023 as the financial market recovery continues.
Venture capital investment in biopharmaceutical companies dropped by more than $1bn from the second to the third quarter, according to the latest data from Evaluate, but the amount of VC dollars invested in drug developers through the first nine months of 2024 is higher than the total for all of 2023.
Biopharma capital markets watchers have noted throughout this year that a recovery is under way, with fundraising conditions improving relative to 2022 and 2023, and the venture capital data so far in 2024 prove the anecdotal observations.
VC investment fell from $7.95bn in Q2 to $6.59bn in Q3, but the third quarter total was slightly higher than the $6.53bn that biopharma firms raised in Q1. All three quarters outpaced every quarter of 2023, so with $21.07bn in venture capital raised through the third quarter, 2024 already has surpassed the $19.61bn in VC investment across all four quarters of last year.
And Evaluate’s initial public offering data for Q3, which showed a spike in drug developer IPOs during the quarter, may give venture investors good reason to boost 2024 investment further in Q4. However, the biggest returns on VC investments come from big pharma purchases of smaller companies and Evaluate’s data show that merger and acquisition activity declined in Q3.
The amount of VC dollars invested in drug developers through the first nine months of 2024 is higher than the total for all of 2023.
Venture capital mega-rounds of $100m or more continue to drive the bulk of the VC funding growth this year, although the totals seen across categories in Q2 – including $5.25bn in $100m-plus rounds – were hard to beat in Q3. Evaluate reported Q3 funding totals of $3.92bn in $100m-plus rounds, $1.48bn in $50m-$100m rounds and $1.19bn in smaller financings.
Financings were smaller overall in Q3, however. While VC firms invested $1.36bn more in biopharma companies during Q2 than in Q3, the number of companies that raised money was almost the same between the quarters at 144 in Q2 and 143 in Q3. That means the average amount raised per company was $46.1m in the third quarter versus $55.2m in the second quarter.
Quarterly Biopharma VC Rounds
The biggest venture capital fundraiser in the third quarter was Arsenal Biosciences, Inc. with a $325m series C round in September to fund clinical development of its autologous programmable chimeric antigen receptor T-cell (CAR-T) therapies for solid tumours.
Cardurion Pharmaceuticals, Inc. raised the fourth-largest Q3 VC financing, with its $260m series B round to fund Phase IIb clinical trials of PDE9 inhibitor CRD-750 in heart failure and a Phase IIa study of CaMKII inhibitor CRD-4730 in catecholaminergic polymorphic ventricular tachycardia.
The third place VC fundraiser, Aktis Oncology, eked out a Q3 spot with its $175m series B round announced on 30 September to fund its radiopharmaceutical programs. Three companies tied for fourth place in Q3 with $150m financings: Scorpion Therapeutics, Inc., CatalYm GmbH and Borealis Biosciences.
Scorpion closed its series C round in July to fund Phase I/II development of its PI3Kα inhibitor STX-478 for solid tumours. German immuno-oncology specialist CatalYm also completed its series D round in July. Borealis launched in August with its series A round to fund development of RNA-based therapeutics for renal diseases.
