Life science VC deals hit post-recession high

BOULDER – First-quarter venture-capital deals backing biotechnology and medical-device companies were the strongest for life-science investments since the Great Recession started in late 2007, with two Boulder Valley companies netting $7.3 million.

The value of life-sciences sector venture-capital deals across the nation in that period increased 15 percent compared with the same period a year ago, according to “Biotech Deals Rising,” a report released earlier this month by PricewaterhouseCoopers LLP and the National Venture Capital Association.

There were 173 deals worth $1.7 billion during the quarter, compared with $1.4 billion and the same number of deals during the same period in 2013.

Biotechnology companies attracted $1.1 billion through 112 deals, and medical-device companies attracted $588 million in 61 deals.

Historically, the second and fourth quarters have produced the largest investments in life-sciences companies.

Analysts said the early attention is a good sign, given that investors as a rule shy away from sectors with longer investment durations and higher capital requirements, as is the case in biotech and medical devices.

“Life sciences and biotechnology investments are off to the strongest start of the year since the recession,” said Greg Vlahos, a life-sciences partner at PricewaterhouseCoopers.

“We’re continuing to see interest in these businesses, especially in the early stages of their development. Venture capital’s ability to monetize their earlier investments and source early-stage investments is a positive sign for ongoing investments in life sciences.”

In the first quarter, Broomfield-based Accera Inc. received $5 million in venture capital from Inventages Venture Capital GmbH, and Boulder-based Mosaic Biosciences Inc. received $2.3 million from Healthcare Ventures LLC, High Country Ventures LLC and Morgenthaler Ventures.

Accera is working on therapeutic drugs to treat Alzheimer’s and Parkinson’s disease. It makes Axona, a powder that can be mixed into drinks and food that, in trials, has been shown to improve cognitive function and memory in Alzheimer’s patients. Accera has been drawing attention from investors for some time, having received $35 million in venture capital during the second quarter of 2013. Accera in January said it is considering becoming a publicly traded company in the next year or two.

Mosaic is developing synthetic materials to support tissue regeneration. Mosaic makes a water-soluble gel that can be used to fill and heal wounds. The gel is going through testing required to receive U.S. Food and Drug Administration approval. It’s made of polyethylene glycol, which also is used in cosmetics, drugs and food additives in the United States.
Marty Stanton co-founded the company in 2009 with research colleagues at the University of Colorado-Boulder, including Pete Mariner, Kristi Anseth and Chris Bowman. The company licensed the gel substance for an undisclosed sum from Anseth’s research lab at CU-Boulder, where it was developed over a period of five years.
The gel substance has biophysical and biochemical properties that support a patient’s tissue structure. As a wound heals, the gel is taken over by healthy cells and dissolves into the body over a two-week period, said Mariner.
Vlahos said a strong initial public offering (IPO) market has contributed to increased venture-capital investments.

In the region, Louisville-based GlobeImmune Inc., which is developing drugs to treat cancer and infectious diseases, is taking a second run at an IPO.

GlobeImmune filed for an IPO last June to raise $69 million, but withdrew the plan in October, saying at the time that the market was not sufficiently attractive as a place to raise money.

It filed again for an IPO in March, hoping to raise $35 million. However, earlier this month it amended its offering, whittling the number of shares for sale from 2.2 million to 1.6 million without changing its target price per share – $15 to $17 – that would generate about $31 million.

With a successful IPO, GlobeImmune would join the ranks of several other biotechs in Northern Colorado and the Boulder Valley that are publicly traded, including Clovis Oncology Inc. (Nasdaq: CLVS) and Array Biopharma Inc. (Nasdaq: ARRY) in Boulder, Arca Biopharma Inc. (Nasdaq: ABIO) and Corgenix Medical Corp. (OTC BB: CONX) in Broomfield and Heska Corp. (Nasdaq: HSKA) in Loveland.

Doug Storum can be reached at 303-630-1959, 970-416-7369 or dstorum@bizwestmedia.com.

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