In the past twelve months, regenerative medicine investments gained momentum, as new and promising clinical data got released. The momentum has been growing in recent years, enabling the cell therapy and genome editing sectors to evolve into a global industry.
In terms of fundraising, 2014 was an outstanding year, with about $6.3 billion raised by regenerative medicine companies. About $3 billion of this total was raised by companies that are involved in gene and gene-modified cell therapy companies.
Collectively, the initial public offering (IPO) market for biotech companies was worth about $1.37 billion. The most important IPO was for Juno Therapeutics. Juno, a company that develops cell-based immunotherapy treatments for cancer, has a market capitalization of $2.2 billion – the largest market cap of a biotech IPO in 2014. In total, Juno raised $265 million from its IPO, a massive IPO given that the company had already raised $314 million in venture capital investments over the past year. Other financial events within the regenerative medicine industry are illustrated in the following table.
TABLE. Major Financial Events in Regenerative Medicine Industry in 2014 (Ranked by Size)
|Examples of Major Financial Events||$ Millions||Date|
|Juno Therapeutics Fundraising Rounds (Multiple Investors, ARCH Venture Fund VII LP one of major investors at 15%)||314.0||April – December, 2014|
|Juno Therapeutics IPO||265.0||19-Dec-14|
|Kite Pharma Follow-On Financing||216.4||10-Dec-14|
|Bellicum Pharmaceuticals IPO||160.6||18-Dec-14|
|Kite Pharma IPO||146.0||20-Jun-14|
|Avalanche Biotechnologies IPO||109.1||31-Jul-14|
|uniQure Initial Public Offering (IPO)||91.8||5-Feb-14|
Major Partnerships and Acquisitions Supporting Regenerative Medicine Investments
Until recently, the relationship between pharmaceutical companies and the cell therapy industry was weak, and many in the industry were apprehensive about the involvement of big pharma within the regenerative medicine industry. While big pharma has long been curious about the new developments in regenerative medicine sector, it has also been reluctant to enter the field. However, in 2014, several large pharmaceutical companies moved into the sector.
The table below presents key partnerships and acquisitions that occurred within the regenerative medicine industry in 2014.
TABLE: Major Partnerships and Acquisitions in Regenerative Medicine Industry in 2014
Total Financings in Regenerative Medicine Industry, by Segment
As mentioned, stem cell, gene therapy, and genetically modified cell therapy firms have begun attracting adequate capital from investors who believe that these products can enter the marketplace and revolutionize the healthcare sector. According to press releases published by the Alliance for Regenerative Medicine (ARM), 2014 was quite remarkable for financings within the regenerative medicine sector. The funds mobilized through different types of financings in 2014 exceeded the 2013 figure in all the segments. During 2013 and 2014, there were some very significant upturns in investment.
Specifically, venture capital funding nearly doubled from $1.028 billion in 2013 to $2.131 billion in 2014, the initial public offerings (IPOs) nearly tripled from $506 million in 2013 to $1.338 billion in 2014, the follow-on private investment in public equity (PIPE) funding increased from $1.403 billion in 2013 to $2.526 billion in 2014, and the upfront partnership payments also increased from $42 million in 2013 to $325 million in 2014.
TABLE. Type of Financing for Regenerative Medicine Industry in 2013 and 2014
|Type of Financing||2013 ($ Millions)||2014 ($ Millions)|
|Venture capital/Private equity/Merger & Acquisition||1,028||2,131|
|Partnership upfront payments||42||325|
|Partnership announced milestones||2,398||8,899|
Source: Alliance for Regenerative Medicine (ARM), “2015 Regen Med & Advanced Therapies – State of the Industry,” January 12, 2015.
In summary, regenerative medicine investments have never been stronger and investments are expected to continue to flow into the field throughout 2015 and beyond.