Two blockbuster fundraises were unveiled on Tuesday, showing that companies on the continent are increasingly attracting VC interest … and from investors with deep pockets.
BioNTech, which develops immunotherapies for cancer and other serious diseases, pulled in $325 million in Europe's largest-ever biotech VC deal*, according to the PitchBook Platform. The Series B, which also happens to be the largest completed biotech transaction in the world so far this year, was led by Fidelity with participation from investors including BVCF, Steam Athena Capital and the company's majority shareholder, the Struengmann Family Office.
The German business will use the capital to fuel the expansion of its clinical pipeline and invest in its manufacturing capabilities. It also plans to boost its US presence, which was recently established following the startup's acquisition of San Diego-based MabVax Therapeutics in May.
Earlier this year, BioNTech had hired Bank of America and JP Morgan to prepare for a listing on the NASDAQ, which could have raised as much as $800 million at a valuation of around $4 billion, according to Reuters. While the company is reportedly still weighing various financing options, it isn't short on cash considering this latest transaction plus its hefty $270 million Series A last year.
As if BioNTech's Series B wasn't enough for Europe, ADC Therapeutics announced on the same day that it has secured an additional $103 million for its Series E, bringing the total amount raised for the round to a whopping $303 million. The Swiss startup develops therapies to treat hematological cancers and solid tumors and, like BioNTech, plans to use the funds for clinical trials.
Both transactions are indicative of the direction in which the European biotech industry is heading. Companies in the sector raised a record €1.3 billion in 2018, per the PitchBook Platform, having recovered from a brief lull which saw the amount of funding received dip in the two preceding years. The question is, what is fueling this uptick in activity? Increasing participation in European rounds from US investors may be one potential reason. Firms such as the Bay Area-based Redmile Group—whose portfolio includes both BioNTech and ADC—are expanding their horizons and increasingly looking outside of their borders for investment opportunities.
VC interest in the industry is also likely inspired by the big payoffs that investors can potentially expect when it comes time to exit. Deals such as Lundbeck acquiring the Netherlands-based Prexton Therapeutics' for up to €905 million and Novo Nordisk buying British business Ziylo for some $800 million have shown that the European biotech industry is a good space for those hunting for alpha.
*excluding corporate venture capital
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Related read: The top 8 VC investors in European biotech startups