UPDATE : Monday, March 30, 2020
Large pool of capital available in biotech space: US venture fund expert
  • By Marian Chu
  • Published 2018.05.11 18:10
  • Updated 2018.05.11 18:10
  • comments 0

American venture capital firms like Mountain Pacific have raised a record amount of funding in the biopharma sector and are looking to invest globally, a U.S. expert said at Bio Korea 2018 Friday.

Ron Heffernan, the general partner of Mountain Pacific Venture Fund, presents the U.S. biopharma sector trends, at Bio Korea 2018 held in COEX, southwestern Seoul, Friday.

“There’s currently a lot of capital available in the United States, and there are many investors, venture capitalists, and corporate investors looking for deal flow and opportunities to invest globally,” said Ron Heffernan, general partner at Mountain Pacific.

“Venture capital companies like ourselves raised a record amount of funding with $9.1 billion invested into the market. Right now there is a large pool of capital that is available to people who are in the biotech space and there’s great opportunity to find for financing,” Heffernan added.

Companies like GRAIL, which develops liquid biopsies, raised $900 million in series B funding while 23andMe raised $250 million, he said. Other companies also raise huge sums with Wuxi NextCode with $240 million in series B funding, Ginkgo BioWorks raising $275 million in series D funding, and BioNTech raising $270 million in series A funding.

“These megadeals are not just here are there. It’s frequent,” Heffernan said.

He noted that fundraising would continue to be active for the next three to five years due to crossover investors making it an exciting time for anyone to raise capital. Especially starting in 2017, funding for biotech startups exceeded $10 billion, breaking the previous record of $7.3 billion in 2013.

“A notable aspect is that deals are much larger. The median series A deal in 2017 was $9 million, which is an unprecedented number,” he said. “We also see mega-rounds. Fewer deals are done, but early-stage companies are doing $100 million rounds in series A and B.”

According to Heffernan, corporate investment drove a lot of the financing with 29 percent of all series A investments in 2017 done by corporate investors such as Big Pharma and some nontraditional firms such as pension funds. All this serves as opportunities for funding in Korea, he said.

“The most active investors were J&J, Celgene, and Pfizer – you’d expect them to be in the space. But now you see companies like Google Ventures and NEA in the sector,” he said. “Those looking to raise capital should view these companies as approachable even though they are large mega companies with multibillion-dollar firms.”

“They are approachable, and they’re looking for deal flow,” he said, noting that often these large companies rely on early-stage innovation as R&D is expensive.

For Korean firms looking to seek out investments, Heffernan advised them to simplify information.

“Start with a one-page document that summarizes what you’re looking for. Again with each step of the process, create questions. This is not to give them all the information. They don’t have the time. And don’t be afraid to go to the big companies,” he said.


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