Beyond Borders: Global biotechnology report 2010

Total capital raised (US$b)
Capital raised by leading US regions, 2009
4.0
3.5
3.0
2.5
2.0
1.5
1.0
0.5
Los Angeles/Orange County
Pennsylvania/Delaware Valley
Mid-Atlantic
North Carolina
Pacific NW
San Diego
0
0 200 400 600 800 1,000 1,200
Venture capital raised (US$m)
Source: Ernst & Young, BioCentury and VentureSource
Size of bubbles shows number of financings per region
to Celgene in 2008 for US$2.9 billion.
Clearly the top-tier investor group in Clovis
hopes this team can create similar value. In
addition to Clovis, there were seven other
first-round financings in excess of US$30
million, most located in the traditional
start-up hotbeds of Northern California, San
Diego and the Boston area. This included
Flexion Therapeutics, which raised US$42
million. (For more information on Flexion’s
activities and approach, see “Lean proof
of concept” by Michael Clayman, the
company’s CEO).
The largest round raised by an established
company was the US$71 million raised
by Zogenix in two tranches. Zogenix is a
specialty pharma company focused on pain
and CNS disorders, and it had originally
filed to go public in 2008 but withdrew
that offering given the difficult funding
environment. Other significant venture
financings included the US$88 million
San Francisco Bay Area
New England
raised in two rounds by Xanodyne, another
specialty pharma company focused on
pain management and women’s health,
and the US$70 million raised by BioVex, a
developer of vaccines for the treatment of
cancer and infectious disease. Developers
of so-called third-generation sequencing
technologies Pacific Biosciences and
Complete Genomics raised US$68 million
and US$45 million, respectively.
Geographic distribution
San Francisco Bay Area and New England
once again outpaced all areas in terms
of total fund-raising in 2009, garnering
US$3.3 billion and US$2.4 billion,
respectively. In terms of venture capital,
the two regions are virtually equal, with
New England having a slight lead in number
of venture rounds and Northern California
having the advantage in capital raised. The
Los Angeles area ranks as the third-largest
region, but almost entirely because of a
single transaction by Amgen. North Carolina
saw its total increase as a result of the IPO
and subsequent debt offering completed
by Talecris. Likewise, the Pennsylvania/
Delaware Valley region saw its total ascend
on the back of big financing years from
Cephalon and Incyte.
Europe
Public companies
While total fund-raising by publicly traded
European biotechs more than doubled
compared to the lows seen in 2008, it is
once again, a story of the haves and the
have-nots. A significant majority of the
increase in 2009 can be attributed to two
transactions: a €461 million (US$643
million) follow-on offering by Netherlandsheadquartered
QIAGEN, and a €449 million
(US$626 million) debt transaction by
Ireland-based Elan. These two transactions
accounted for 44% of all funds raised by
public biotechs in Europe in 2009. In 2008,
the top five fund-raisers accounted for
a similar percentage of the total capital
raised, with the largest transaction being
a €157 million (US$231 million) rights
offering by the Swedish company Meda.
Absent QIAGEN and Elan, fund-raising by
public companies would have increased by
26%, which is still respectable but must be
considered in light of the overall 78% decline
that occurred in 2008 as compared to
2007. Other notable follow-on offerings in
2009 included NicOx of France (€70 million,
US$98 million), NeuroSearch of Denmark
(€58 million, US$81 million), UK-based
Proximagen (€56 million, US$78 million)
and Sweden-based Biovitrum (€52 million,
US$73 million).
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