The environment for raising private capital continues to be challenging and, as a result, there has been a dramatic slowdown in the number of deals that have successfully been concluded.

Worldwide, according to BioWorld Snapshots, private biotech companies developing therapeutics raised $403.5M in VC dollars in the first quarter of 2013, down a whopping 48 percent from the $775 million raised in the same period last year.

BioWorld Insight writer Brian Orelli noted that among the VC funding of U.S. companies developing therapeutics, the number of deals, where the funding round was disclosed, dropped from 25 in the first quarter of last year to 21 this year. The total value of those deals looked even bleaker, falling 27 percent from $391 billion last year to just $285.5 billion this year. (See BioWorld Today, April 1, 2013.)

Widening those data to all U.S. biotech deals, including those where the funding round was not disclosed, there were 25 deals completed in Q1 2013 compared to 39 in Q1 2012, a drop of 36 percent.

Of the 41 global deals that disclosed financial terms in the first quarter, 39 percent involved overseas companies, which collectively raised $84 million.

The largest non-U.S. deal involved Dezima Pharma BV, of Naarden, the Netherlands, which raised €14.2 million (US$18.6 million) for the clinical development of its cholesteryl ester transfer protein (CETP) inhibitor, DEZ-001, and to develop additional earlier-stage dyslipidemia assets. The amount included €9.8 million in a Series A funding round and a €4.4 million loan from Dutch Ministry of Economic Affairs agency Agentschap NL. The company in-licensed the CETP inhibitor DEZ-001 from Mitsubishi Tanabe Pharma Corp., of Osaka, Japan, and is planning to move the drug into a Phase II trial involving more than 400 patients. (See BioWorld Today, March 6, 2013.)

Despite seeing fewer Series A investments, the value of the group went up, thanks in large part to Third Rock Ventures LLC starting Jounce Therapeutics Inc. with a solid starting foundation of $47 million to develop cancer therapies. (See BioWorld Today, Feb. 14, 2013.)

Third Rock assembled a team of leading cancer biologists and immunotherapy experts to form Jounce. Based in Cambridge, Mass., the company will seek to discover and develop first-in-class cancer immunotherapies in a space that has drawn enormous interest since the FDA approvals of immune-stimulating targeted therapeutics Provenge (sipuleucel-T, Dendreon Inc.) and Yervoy (ipilimumab, Bristol-Myers Squibb Co.).

Initially, the company will focus on tumor immunobiology, antibody discovery and optimization and integrated translational science, including in vivo tumor modeling.

"We consider this the dream team of cancer immunotherapy," said Cary Pfeffer, a partner at Third Rock and interim CEO of Jounce.

Another notable Series A deal involved start-up biotech Labrys Biologics Inc., which snagged $31 million with participants in the round including venBio, Canaan Partners, InterWest Partners and Sofinnova Ventures.

With the close of the financing, San Francisco-based Labrys acquired global rights to RN-307 a Phase II-ready anti-calcitonin gene-related peptide (CGRP) humanized monoclonal antibody (MAb) from Pfizer Inc. to treat chronic migraine. from Pfizer in return for an undisclosed up-front payment plus potential milestone payments, sales royalties and a liquidity payment if Labrys is acquired.

RN-307 was discovered and originally developed by Rinat Neuroscience Corp., a South San Francisco protein therapeutics company that was acquired by Pfizer in 2006. (See BioWorld Today, April 10, 2006.)

In a Series C financing Versartis Inc., of Redwood City, Calif., raised $25 million to support clinical trials of its product candidate VRS-317 for growth hormone deficiency in children. (See BioWorld Today, Jan. 16, 2013.)

The drug is a once-monthly form of recombinant human growth hormone (HGH) that is being studied in a pediatric Phase I/II trial at 30 sites in the U.S. The first stage of the trial will evaluate ascending doses of a single subcutaneous injection of VRS-317. The second stage of the trial will evaluate efficacy in patients as measured by increase in height velocity over six months of treatment.

In order to develop a form of HGH with a longer half-life in the body, Versartis modified recombinant HGH with a sequence of hydrophilic amino acids using technology licensed from Amunix Inc.