Regional biotech firms had a record year in VC, as reported by the Portland Business Journal on 1/10/2022.
Venture capital poured into the Oregon and Southwest Washington biotech sector in 2021, with investments blasting past the two previous years.
All told, there was about $324 million in VC investments in biotech and digital health companies last year, according to data compiled by PitchBook and The Business Journal. That’s up from $173 million in 2020 and $87 million in 2019 and appears to be a record sum.
Not only was the dollar amount up, but so was the number of deals, at 37, compared with 22 in 2020 and 23 in 2019.
Absci Corp., a synthetic biology company based in Vancouver that went public last July, led the pack, with a $125 million investment led by New York-based Casdin Capital and Redmile Group, on the heals of a $65 million deal in October 2020. The data doesn’t include Absci’s other huge financial infusion, when it raised $230 million in a July IPO that was the largest ever for a regional biotech.
But Absci (Nasdaq: ABSI) didn’t hog all the cash. Sparrow Pharmaceuticals, which is developing novel, targeted therapies for disorders caused by excess corticosteroids, raised $50 million in April. And Brave Care, which is building out a network of pediatric clinics, raised $35 million over the course of the year.
The soaring number and value of deals bespeaks an industry that finally may be coming of age, after years of slow but steady progress in the shadow of the major biotech hubs of Seattle and San Francisco.
“It’s the maturity of the industry,” said Liisa Bozinovic, executive director of Oregon Bio, a trade association. “In general, the pandemic helped somewhat in terms of equalizing the playing field for connecting with VCs in a virtual environment, so that provided an opportunity for regions that didn’t have that direct connection.”
The growth will likely beget more investment, since it provides a track record that can offer assurance that the region is viable as a place to grow companies and attract a qualified workforce.
“We have examples of successful companies that are able to move into that development stage and raise institutional capital. That’s important because investors don’t necessarily want to be the first to dive in,” said Dan Snyder, Board chair for Oregon Bio and former president of MolecularMd, a Portland molecular diagnostics company that sold to a global drug developer in 2019. “VCs outside of Oregon are going to look at opportunities.”
Indeed, VC firms from Silicon Valley, Chicago and New York have put money into Oregon biotech companies in recent years, as have home-grown investors, including Portland Seed Fund, Oregon Venture Fund and Rogue Venture Partners.
Portland Seed fund has invested $750,000 in seven Oregon-based biotech companies connected either to the Portland State University accelerator or the OTRADI Bioscience Incubator. Managing Director Angela Jackson said she anticipates more investments in the sector in 2022.
“For us, it’s always been a reasonable chunk of our investment but hasn’t accelerated per se, it’s always been there,” Jackson said. “Generally, we believe it’s an important place to play and we seek to diversify, so you’re probably not going to see us above 20% in health deals.”
(Data source: Pitchbook; article and chart/graphics provided by the Portland Business Journal)