As ever, bank SVB’s fascinating look into the US venture market in healthcare reveals a host of insights with half of last year’s most active corporate venturing (CVC) units in the first half cutting back significantly at this year’s mid-point.
Whereas Novartis Venture Funds was the most active CVC in the first six months of 2015 with nine US deals, it has fallen out of the top 10 table for the same period in 2016. Similarly, Celgene and GlaxoSmithKline’s SR One have also dropped out of the table and Johnson & Johnson Innovation has halved the number of its US deals to three from six in the 2016 and 2015.
J&J said it had done 22 deals in the first half of the year, including 11 new ones and the same number of follow-ons.
Jens Eckstein, president of SR One, told Global Corporate Venturing: “No slowdown, coincidental combo of timing and stealth for NewCos. At least half a dozen follow-up rounds for portfolio companies.”
This month, SR One has backed Second Genome, which expanded its series B round to $51m. GCV took a look at how the round fits into some of the subsector’s other big funding rounds of late in this week’s Big Deal.
Only AbbVie Biotech Ventures, under new boss Scott Brun and veteran dealmaker Margarita Chavez, and Roche Venture Fund have entered the top 10, with five and three deals, respectively.
Brun, head of AbbVie Ventures and vice-president in the corporate strategy office, by email told GCV: “Regarding our deal flow, as we discussed [Wednesday], we are strongly refocused on completing strategic deals that supplement our core areas of R&D focus. By devoting the team entirely to venture investing, we are working to more proactively source high quality deals in our direct areas of expertise.”
However, Pfizer Venture Investments has leapt to the top of the table with an increase to nine deals in the first six months of this year from seven last year. This deal count was enough to put Pfizer above the most active venture capital in US healthcare, OrbiMed, which struck eight deals in the first half (H1) compared to 16 in 2015’s H1.
SVB expects healthcare investment to reach $9bn-$9.5bn for full-year 2016, down slightly from 2015, even though potential distributions are on pace to reach $15bn-$17bn this year.
One deal, Stemcentrx’s $9.8bn acquisition (M&A) by AbbVie, contributed almost half of all H1 2016 total potential distributions, SVB said, adding: “We anticipate M&A big exits to pick up in 2H 2016 and exceed the 2015 total.”
SVB had been provided $100m to Stemcentrx, according to Global Corporate Venturing’s analysis of the exit.