Health care, pharmaceuticals, and biotech have all benefited from an influx of investments in recent years as venture capital firms and hedge funds demonstrate they’re especially keen to tap into an industry that continues to deliver unmatched value for stakeholders.
According to recent statistics, venture fundraising in health care grew in the first half of the year, a welcome uptick following a relatively slow end to 2022. The first quarter saw funding hit $6.8 billion, whereas the second quarter saw a marginal increase to $6.9 billion. Things slowed down somewhat in the third quarter, where $2.5 billion in venture capital was recorded across 119 deals.
Here’s a look at five of this year’s most notable investments.
1. Eldeon Pharmaceuticals (Armistice Capital and others)
Clinical-stage transplant and immunology-focused biopharmaceutical company Eldeon Pharmaceuticals announced in May that it had secured up to $185 million in financing from investors including Armistice Capital and BVF Partners LP.
“This financing represents a significant commitment by our shareholders to advance the development of tegoprubart in kidney transplantation,” said CEO David-Alexandre C. Gros. Tegoprubart is a novel antibody that acts in a highly targeted, disease-specific way to tamp down the immune system.
2. CMR Surgical (SoftBank and others)
CMR Surgical, which sells robotics systems that help surgeons perform operations to treat cancer and bowel disease, announced a $165 million funding boost from existing investors SoftBank and Tencent in September. This round of funding involved only the company’s existing pool of investors and followed the company’s $600 million Series D round in 2021, which led to CMR Surgical being valued at $3 billion.
CMR Surgical, whose 1.5 million pounds sterling (approximately $1.5 million) flagship product Versius launched in 2019, will use the funds to expand in the U.S., Japan, and China, pending regulatory approval. The company declined to comment on when it expects to be able to release products in those markets, however.
3. Gracell Biotechnologies (Vivo Capital and others)
Gracell Biotechnologies, a global clinical-stage biopharmaceutical company dedicated to developing innovative and highly efficacious cell therapies for the treatment of cancer and autoimmune diseases, announced a $150 million private placement financing in August. Led by Vivo Capital, other investors included Adage Capital Partners and OrbiMed.
Gracell intends to use the net proceeds from the financing to fund the research and development of its clinical-stage product candidates, working capital, and other general corporate purposes. The company says that the proceeds from this financing, combined with current cash, is expected to fund Gracell’s existing operating plan through to the second half of 2026.
4. Compass Pathways (TCGX and others)
Compass Pathways, a biotechnology company dedicated to accelerating patient access to evidence-based innovation in mental health, announced in September that it had secured $285 million in financing in a round led by TCGX and joined by Armistice Capital, Vivo Capital, and RA Capital, among others.
Compass is currently pioneering the development of a new model of psilocybin therapy, in which the company’s proprietary formulation of synthetic psilocybin, COMP360, is administered alongside psychological support. Psilocybin is a naturally occurring substituted tryptamine that is structurally related to serotonin. The funding will be used to advance Compass’ pivotal Phase 3 programs in treatment-resistant depression and achieve important milestones in the development of COMP360.
5. IO Biotech (Pivotal Life Sciences and others)
Clinical biopharmaceutical company IO Biotech, which is leading the development of novel, immune-modulating cancer vaccines based on its T-win technology platform, announced in August that it had entered into a purchase agreement and expected to raise gross proceeds of $75 million from new and existing investors including Vivo Capital, Armistice Capital, and Pivotal Life Sciences, among others.
IO Biotech, which was founded in 2014, is a clinical-stage company developing novel, immune-modulating cancer vaccines that are designed to activate T-cells and target the most important immunosuppressive cells in the tumor microenvironment. A spokesperson for IO Biotech said that the $75 million in new funding will help the company fund its operations through to the fourth quarter of 2025 and continue the development of its novel vaccines. The company hopes that these vaccines will become the “backbone of combination therapy” for people with cancer.