Moderna founder raises another $2B to fuel new startups

 

• Flagship Pioneering, the investment firm behind Moderna and dozens of other biotechs, said Monday it has raised billions of dollars more to support new health and sustainability companies.
• Flagship closed its seventh so-called "Origination Fund" in spring 2020, after bringing in $1.1 billion. But the firm just announced that it had re-opened the fund in April to current limited partners, as well as a "select group" of fresh investors. The fund has since raised an additional $2.2 billion, for a total pool of $3.4 billion.
• Noubar Afeyan, Flagship's founder and CEO, told BioPharma Dive the fund's cash should be enough to finance between 20 and 25 companies, around a dozen of which are already being formed.

More money is flowing into startup drugmakers than ever before. The financial services firm KPMG found that, between January and March, U.S. pharmaceutical and biotech companies received $10 billion in venture capital funding, equal to 38% of all venture investments in those sectors last year.

The money comes from firms like Flagship, Third Rock Ventures, Polaris Partners and Versant Ventures, which collectively raised billions of dollars over the last few years. The fresh funds suggest investors are confident they'll see returns. Indeed, the two main ways these firms cash out on their companies — biopharma acquisitions and initial public offerings — both recently hit historic highs, although dealmaking has since slowed and many newly public biotechs have seen their share prices tumble.  

The COVID-19 pandemic is likely still influencing investors, too, as it underscored the vital need for healthcare infrastructure and new drug development. Moderna, for example, proved with its highly effective vaccine the immense value of messenger RNA medicines, and in doing so has seen its stock price grow almost 10-fold since March 2020.

"A lot of the new investors, certainly, I'm sure looked at Moderna. But also there's another dozen or so highly visible platforms that we've created," said Flagship's Afeyan in an interview.

Alongside Moderna, Flagship has founded and incubated high-profile biotechs like Sana Biotechnology and Denali Therapeutics. Now, with the re-closing of its seventh fund, the firm has much more money at its disposal for company creation. Flagship said the new funding will support startups focused on human therapeutics, agriculture and nutrition.

Recently, Flagship has unveiled several startups, including a company called Laronde that's developing a new type of RNA technology and has ambitions as lofty as Moderna. 

"People are beginning to see that this is a moment in biotech, where more and more there's a proof point of what's possible," said Afeyan.

Flagship also plans to direct funds at two of its divisions: the Pioneering Medicine Division, which launched this year, and the Preemptive Medicine and Health Security Initiative, which Flagship said will debut soon, with the aim of safeguarding and improving health before a person gets sick. 

Flagship said it has an aggregate pool of $6.7 billion on hand, and $14.1 billion assets under management. According to the firm, its portfolio companies have received a total $4.8 billion over the past year, with $370 million coming from Flagship and more than $4.4 billion coming from other capital providers.

https://www.biopharmadive.com/news/flagship-raises-2-billion-biotech-creation-fund/601763/