In an uncertain time that’s dominated by COVID-19, Flagship Pioneering Inc. and Arch Venture Partners collectively raised a massive $2.56 billion to fund new company creation and growth.
Flagship closed a $1.1 billion capital raise for its seventh Origination Fund to create companies originating and operating in its Flagship Labs unit. The project began in the middle of January and it was concluded March 13, “the day we started to work from home in the non-lab part of what we do,” Noubar Afeyan, Flagship’s founder and CEO, told BioWorld. “We did the majority of the closing March 27, but it was not a reaction to the coronavirus situation.”
Flagship’s seventh original fund – it usually creates a fund every two or three years – raised about $800 million in 2017. The newest round, however, was born in a different set and setting.
“We certainly are in the middle of a crisis, so it’s difficult to look ahead very much just because in the world we operate in there are always extreme uncertainties,” Afeyan said. “I’ve always had the view we’re in the business of known uncertainties. You don’t know if a product will work, and on and on. But once in a while there are uncertain uncertainties. You can’t act with confidence and you take mitigation steps. Hopefully, in time we’ll come out of that.”
Afeyan said he’s hopeful about the future and looks for a promising horizon. As for Flagship, he said, “we just create our own scientific advances, then advance them.”
The company’s new capital pool is designed to operate alongside other Flagship funds of $1.08 billion raised in the past year for supporting its companies once they are spun from Flagship Labs. When looking at the business to develop in the coming years, Flagship decided to create Pioneering Medicines for developing product ideas from existing Flagship Lab platforms, deepen its artificial intelligence and machine learning capabilities and launch a health security focus to create products and therapies to improve health defenses by treating pre-disease states before they escalate. The need for the latter, Afeyan said, is underscored by COVID-19.
Last year, Flagship launched six internally operated companies from Flagship Labs, including Senda Biosciences Inc., Generate Biomedicines Inc., Tessera Therapeutics Inc. and Integral Health. It currently operates 15 wholly owned companies.
Investing in risk-takers
Arch closed two new funds, its Venture Fund X and Venture Fund X Overage, with a combined $1.46 billion, both for investing in early stage companies. Arch’s funding for a company could come from either group, but the Fund X Overage will be used, the company said, in fewer deals requiring larger investments. Their predecessors, Fund IX and Fund IX Overage, closed in 2016 with a combined $560 million.
A certain amount of swagger comes with Arch’s new funding. Co-founder and Managing Director Robert Nelson said Arch will “continue to invest aggressively” in risk-takers. He said he sees a health care revolution taking place in the midst of the battle against COVID-19. In a March 31 Twitter post, he railed against the rules that have delayed the progress of practicing across state lines, telemedicine, reimbursement, diagnostics and providing mental health care online. Those rules “are all gone or going. They will never come back. Total revolution.”
Arch companies in the COVID-19 trenches include Vir Biotechnology Inc., Alnylam Pharmaceuticals Inc., VBI Vaccines Inc., Brii Biosciences Ltd. and Sana Biotechnology Inc.
Vir, for one, said it identified multiple human monoclonal antibody development candidates that neutralize SARS-CoV-2. In order to speed development, its lead development candidate was transferred at-risk to Wuxi Biologics Co. Ltd., of Shanghai, and Cambridge, Mass.-based Biogen Inc. several weeks ago, and Vir anticipates that human trials will begin within the next three to five months.
VBI said it is collaborating with the National Research Council of Canada, Canada’s largest federal research and development organization, to develop a pan-coronavirus vaccine candidate targeting COVID-19. VBI will use its enveloped virus-like particle (eVLP) platform technology and, based on past clinical experience with the eVLP platform, said it expects it will be possible to develop a multivalent eVLP vaccine candidate, co-expressing SARS-CoV-2, SARS-CoV and MERS-CoV spike proteins on the same particle.
Early stage Arch investments have included Illumina Inc., Juno Therapeutics, Receptos Inc., Agios Pharmaceuticals Inc., Sage Therapeutics Inc., Bluebird Bio Inc., Codiak Biosciences Inc., Denali Therapeutics Inc., Grail Inc., Karuna Therapeutics Inc., Beam Therapeutics Inc., Ikaria Inc., Gossamer Bio Inc., Fate Therapeutics Inc., Array Biopharma Inc., Unity Biotechnology Inc., Hua Medicine Ltd., Decode Genetics and Homology Medicines Inc.