The pandemic has fuelled investor interest in biotech, life sciences and drug discovery with state-owned investors ploughing more than US$5.5 billion into the space so far this year, mostly in the form of venture capital for startups – an increase of 53% over the whole of 2020.
Overall venture capital investment in drug discovery doubled to more than US$16 billion in 2020, according to TechCrunch. The king of state-owned investors in biotech is Temasek, which has devoted more than US$1 billion in 19 venture capital rounds so far this year, mostly in Chinese and US startups.
This week has seen sovereign wealth funds Alaska Permanent and Abu Dhabi Investment Authority (ADIA) participating in a US$370 million Series B financing round for Generate Biomedicines. Other investors include Fidelity, Arch Venture Partners, Altitude Life Science Ventures, Morningside Ventures, and T. Rowe Price Group.
The company is advancing an artificial intelligence platform-based approach to drug development, focusing on making novel proteins. Therapeutic proteins such as monoclonal antibodies are gathering interest, increasing their importance in the medicines market. Generate Biomedicines is specifically interested in developing antibodies, which represent the biggest share of biomedicines production. It is one of several ventures nurtured by Flagship Pioneering, which was behind the development of the Moderna vaccine and is infectious disease, oncology and immunology.
The potential the novel proteins and the development of the science behind them, along with Flagship’s track record of backing successful innovative biomedical companies, attracted the attention of Alaska Permanent and ADIA – and indicates the kind of biotech company state-owned investors prefer. In January, Alaska Permanent and Qatar Investment Authority (QIA) were among the backers of a US$230 million Series B financing round for another Flagship Pioneering company, Tessera Therapeutics, which is developing gene writing to treat diseases at the genome level.
Other AI-driven discovery platforms attracting SOI attention include Canadian Pension Plan Investment Board’s backing of Deep Genomics’ US$180 million Series C financing round in July, supporting its development of programmable RNA therapeutics to treat genetic diseases. Another Abu Dhabi sovereign wealth fund, Mubadala, is also helping back the development of AI-driven drug discovery with support for Xilis’s Series A round in July, Vividion Therapeutics’ Series C round in January and Alloy Therapeutics’ Series C round in April.