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June 4, 2014
Biotechnology Private Placements Generate Robust Funding in First Quarter
Private companies in the biotechnology sector managed to raise more than $670 million by holding private placements in the first quarter.

Private companies in the biotechnology sector managed to raise more than $670 million by holding private placements in the first quarter.

More than 100 placements in Q1
Firms in this industry held 117 of these transactions during the first three months of the year, showing the strong interest that investors have in this particular niche.

2 firms raise more than $60 million
C3 Jian, which is based in Los Angeles and develops compounds to help treat oral healthcare needs, raised $60.5 million in a Series D round. The biotech firm rounded up these funds in an effort to conduct a mid-stage study for its principal tooth decay treatment, according to FierceBiotech.

Kolltan Pharmaceuticals, which is based in New Haven and creates new biologics that specifically work on receptor tyrosine kinases, raised $60 million through a Series D round. A Boston-based global institutional asset manager, which is new to investing in Kolltan Pharmaceuticals, and KLP Enterprises, which previously funded the New Haven-based biotech firm, led this round, FinSMEs reported.

Mountain View, California-based Edison Pharmaceuticals, which creates treatments for mitochondrial disease, announced in January that it had entered a strategic alliance with Japan-based pharmaceutical firm Dainippon Sumitomo Pharma Co., Ltd.

This partnership involves Edison receiving a total of $50 million in exchange for the right to develop and commercialize certain treatments in North America and Japan. DSP will pay $10 million upfront, and the rest will be given in research and development support.

The strategic alliance, which contains other provisions, could be worth more than $4 billion. Edison could potentially receive another $30 to $105 million if EPI-589, a drug it is developing that targets the central nervous system, has success, according to Law360, the company has stated. In addition, the firm could receive payments of between $10 and $30 million for the development of compounds in North America and Japan.

AqueSys placement
Another company that held a successful private placement during the quarter was AqueSys, Inc., which develops, produces and then distributes medical devices used by glaucoma surgeons. On Jan. 16, this firm announced that it raised $43.6 million through a Series D funding round.

An investor that wished to remain anonymous led this funding round. In addition, existing vendors Accuitive Medical Ventures, SV Life Sciences, The Carlyle Group, Rho Ventures and Longitude Capital all took part in the fundraising.

Regional distribution of placements
In terms of the private placements held by biotech firms, the West dominated this particular period. Companies in this sector held a total of 38 of these offerings during the first quarter.

The U.S. New England region came in second, as biotech firms there had 21 private placements in the first three months of 2014. The U.S. Mid-Atlantic region was a close third, as industry companies there held 20 of these offerings during the period.

There were five separate regions where biotech firms had less than 20 private placements in the first quarter. Three of these were in America. The U.S. Southeast, U.S. Midwest and the U.S. Southwest held 12, 11 and three of these transactions, respectively.

In Canada, companies in the industry had another nine of these offerings. Biotech firms outside the U.S. and Canada had three private placements during the period.

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