Cash flowing to global private companies in the fourth quarter slowed slightly, with venture investments totaling approximately $2.08 billion for the period. That amount was 7 percent lower than the $2.25 billion generated in the third quarter. However, deal volume increased with a total of 69 deals completed, compared with the 59 deals that took place in the previous quarter. For the year, private financing deals amounted to $8.62 billion.

U.S.-based companies garnered $965 million (46 percent) of the total raised from 36 transactions. That was well off the $1.77 billion raised by U.S. companies from 41 deals in the third quarter.

Intarcia Therapeutics Inc., of Boston, took the second spot in terms of size of financing for the year but needed two transactions to do it. At the end of 2016, it disclosed it had completed a second close of a series EE financing, raising $206 million. It also entered a relationship with the Bill & Melinda Gates Foundation to help prevent the spread of HIV in sub-Saharan Africa and other countries where the HIV epidemic is most severe. As part of its commitment, the Gates Foundation will invest up to $140 million; $50 million is a program-related investment into the series EE round, with up to $90 million in nondilutive milestone-based grants tied to the HIV prophylactic program.

In September, the first close of $215 million was made. The company's lead product, ITCA 650 (continuous subcutaneous delivery of exenatide), is being developed as a once- or twice-yearly therapy for the chronic treatment of type 2 diabetes. The investigational therapy employs the company's technology platform, the Medici drug delivery system. In its phase III trials for type 2 diabetes, the product was evaluated while delivering a continuous and consistent drug therapy in a three-month initiation dose, followed by consecutive six-month doses. Exenatide, the active agent in ITCA 650, is a GLP-1 receptor agonist that is currently marketed globally as twice-daily and once-weekly self-injection therapies for type 2 diabetes. If approved, ITCA 650 would be the first and only injection-free GLP-1 therapy.

San Francisco-based Unity Biotechnology Inc. was also involved in a significant deal, closing a $116 million series B financing to expand ongoing research programs in cellular senescence and advance its first preclinical programs into human trials. (See BioWorld Today, Oct. 28, 2016.)

The company's sweet spot is building upon the growing body of work showing the promise of treating human diseases via the selective elimination of senescent cells. Cellular senescence, the company has explained, is a critical anticancer system, as it stops potentially damaged cells from growing out of control. However, senescent cells can accumulate in the body as we age, secreting growth factors, proteases and inflammatory factors that disrupt normal tissue function. That may be a contributor to the chronic inflammation observed in many age-related diseases. Unity is developing senolytic medicines designed to selectively eliminate senescent cells linked to diseases of aging, such as osteoarthritis, glaucoma and atherosclerosis.

Another deal of note in the period was Biohaven Pharmaceutical Holding Co. Ltd.'s completion of an oversubscribed $80 million private financing. The round was led by Venrock and joined by other leading biotech investors, including RA Capital Management, Vivo Capital, Aisling Capital, Rock Springs Capital, John W. Childs, Knoll Capital Management, Osage University Partners, Aperture Venture Partners, Connecticut Innovations, Greg Bailey and Litmore Capital. Two undisclosed blue chip pharmaceutical companies also participated in the round as part of in-licensing agreements with the company.

Proceeds from the financing will be used to advance the company's late-stage clinical programs in orphan neurologic indications and other trials in areas of large unmet medical needs. It plans to initiate a number of phase II/III studies and, in December, the company announced that it had enrolled the first patient in a potentially pivotal phase IIb/III trial assessing the efficacy and safety of its drug candidate, BHV-4157, in patients with hereditary spinocerebellar ataxia (SCA), a rare and debilitating neurodegenerative disorder with no currently approved therapies.

Biohaven plans to enroll approximately 120 patients in the trial across 15 sites in the U.S. The primary outcome measure is the change from baseline in the total score on the Scale for Assessment and Rating of Ataxia. The trial will also assess the safety, tolerability and pharmacokinetics of BHV-4157. If the results are positive, Biohaven expects to be able to submit a new drug application for BHV-4157 for the treatment of SCA.

European cash flow

There was a bump in the number of European companies attracting venture capital in Q4, which collectively were able to raise $488.3 million (34 percent) from 20 deals, according to BioWorld data.

ADC Therapeutics Sarl raised $105 million in what proved the largest private funding round by any biotech in Europe in 2016. (See BioWorld Today, Oct. 19, 2016.)

The funds will allow the company to advance its lead programs, ADCT-301 and ADCT-402, to the end of phase I and into registration trials in subtypes of lymphoma and leukemia. In addition, it is planning a phase I trial in prostate cancer to be followed by trials targeting breast and gastric cancers this year.

Just behind ADC Therapeutics in terms of money raised is Dublin-based Carrick Therapeutics Ltd., which padded its bank balance with a whopping $95 million from a series A round. (See BioWorld Today, Oct. 4, 2016.)

China attracts private equity

Those transactions were eclipsed by Innovent Biologics Inc., of Suzhou, China, which raised $260 million in November from government-backed and independent investors in what represents the largest financing round ever for a private biopharmaceutical company in China and the third largest for the sector globally in 2016. (See BioWorld Today, Nov. 30, 2016.)

The financing is another indication that China is witnessing a greater involvement by private equity investors and insurance giants with close ties to the Chinese government in biotech innovation; the deal comes on the heels of Shanghai-based Cstone Pharmaceuticals Co. Ltd. raising $150 million from its series A financing round.

Innovent has established a pipeline of 12 biosimilars and biobetter candidates along with the capability to manufacture biologics in commercial quantities. It has implemented three phase III head-to-head biosimilar trials in China and expects to have its first products on the market in 2019. Its main focus is on treatments for cancer, ophthalmology, autoimmune disorders and cardiovascular diseases.

Reinforcing the fact that companies outside the U.S. are beginning to attract more venture capital than they have previously are the increasing number of deals being concluded by Canadian biopharmas, with five private companies receiving venture backing. Bluerock Therapeutics will not only have a significant footprint in Canada with research and development operations in Toronto, but also a presence in New York and Boston that will allow the company to benefit from its international and cross-border partnerships. The next-generation regenerative medicine company plans to develop best-in-class induced pluripotent stem cell therapies to cure a range of diseases, with a focus on cardiovascular diseases and neurodegenerative disorders.

The company is being supported by partners Bayer AG and Versant Ventures, which have committed $225 million in series A financing. (See BioWorld Today, Dec. 13, 2016.)

One of Bluerock's initial programs is to regenerate heart muscle in patients who have had a myocardial infarction or are suffering from chronic heart failure. The program's goal is to restore the electrical and contractile function of injured hearts through remuscularization with pluripotent stem cell-derived cardiomyocytes.

Ottawa, Ontario-based Turnstone Biologics Inc. raised $41.1 million in a series B round to accelerate clinical development of its next-generation oncolytic virus and cancer vaccine platform. (See BioWorld Today, Nov. 2, 2016.)

The platform targets tumors using a two-pronged mechanism of action, by functioning both as an oncolytic agent and as an immune-stimulating vaccine directed at specific cancer antigens. The most advanced product in development is an oncolytic Maraba virus that is engineered to express melanoma-associated antigen A3 (MAGEA3). Completion of a phase I/II monotherapy trial is expected this year. Also in the works is a phase I/II trial in combination with an approved checkpoint inhibitor in patients with non-small-cell lung cancer.

By the numbers

For the year, private financing deals amounted to $8.62 billion, which was 17.5 percent off the record-setting total of $10.45 billion raised in 2015.