2012 Financing Recap: Cell Therapy and Cell-Based Regenerative Medicine Companies

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In October we posted a teaser saying that we had at that time tracked the infusion of over $1 billion dollars into cell therapy and cell-based regenerative medicine companies in 2012.  We promised details.  Here they are:

For the first half of the year, see our post "Monthly recap of funds raised by cell therapy & regenerative medicine companies" dated July 31 and updated August 8.

Since that post, we back-filled the following deals which we missed earlier:

• In February, Stemgent raised $6.3M from eight private investors
• In April, BioRestorative Therapies raised $2.1M from undisclosed private parties
• In July, Immusoft received a $300,000 grant from NIH-SITR.

August saw the following financings:

• Cell Cure Neurosciences was awarded $1.3M from Israel's Office of the Chief Scientist
• Stemgent collected another $11.3M from eight private backers
• Neuralstem brought in $2.76M in a public offering
• Fate Therapeutics received $9.2M from undisclosed investors

September was a busy month with the following deals and grants:

• Cellerant benefits from a further BARDA grant tranche with the potential to hit upwards of $36.4M
• StemCells Inc saw the second of its CIRM-funded boats come in to the tune of $20M
• Argos Therapeutics collected $16M from 24 different unnamed investors
• Neuralstem succeeded in bringing in another $7M in a direct public offering
• Pluristem rode its well-orchestrated fame to a $34M underwritten public offering
• Advanced Cell Technology brought in $35M via ATM
• Cellerant collected $2.09M from private investors
• Cytori was awarded a BARDA grant with potential to hit up to $106M
• Vital Therapies closed the first $16M from a multistage commitment to invest $76M by existing private investors. The investment is intended to fund three  Phase III trials of the company’s bioartificial liver therapy, ELAD, for two types of acute liver failure. One trial in the US (not yet recruiting) in acute alcoholic hepatitis involving 200 patients; the other two trial in EU and Australia/New Zealand for acute alcoholic hepatitis patients who fail steroid therapy and in subjects with fulminant hepatic failure
• Avita Media rounded out the month with a modest $880,000 grant from AFIRM

So after seeing $172M come into the sector in Quarter One and $252M in Quarter Two, the Third Quarter saw companies in the sector glean commitments of up to $408M from various sources. 

The Fourth Quarter saw $288M infused into the sector broken down as follows:

    October

• Capricor gleaned a $19.8M from CIRM
• China Cord Blood Corp secrured $50M in a convertible note financing from Golden Meditech Holding Limited
• Cellerant kept the grant machine rolling with a $1.7M phase 1 SBIR grant from NCI
• Tengion secured $15M in senior secured convertible notes from Celgene Corporation, RA Capital Management,  Deerfield Management Company, Bay City Capital and HealthCap
• Viacyte saw a $10M grant from CIRM
• Massachusetts-based Bluebird Bio finagled $9.36M from California's CIRM
• Fibrocell Sciences did a $45M PIPE
• Avita Medical gleaned $10M from a secondary public offering

    November

• Athersys closed a $23M secondary offering priced at $1.00
• Tissue Regeneration Therapeutics eked out a $100,000 grant from Ontario Genomics Intitute
• Quy Biosciences (formerly MedCell) raised $2.7M in a private placement
• Kiadis Pharma managed a $12.8M financing round lead by LSP (Life Sciences Partners) and supported by a large investment from DFJ-Esprit. Other investors included Alta Partners, Quest for Growth and NOM.  The round will be used to do a late-stage phase 2 trial which they hope will position them for a solid pivotal with partner, Hospira.
• NeoStem received a $1.2M grant from NIH
• French biotech, TxCell raised €12.4M from existing shareholders to support an internationa ph 2b trial of Ovasave for the treatment of Crohn’s disease in patients who are refractory to current treatments.
• In a Biotech Showcase presentation, Adaptimmune COO reported they were given 9.6M British Pounds by 'high-net-worth investors' in November to move forward their clinical pipeline

    December

• Northwest Biotherapeutics brought in $13.8M in a secondary public offering
• Organovo secured $7.7M in a tender offer to warrant holders
• Cytori closed a $23M secondary public offering (including the shoe)

Unfortunately neither Cell Therapy Group, nor any of our industry organizations, have any comprehensive financing data from year's past to know for certain whether broaching this $1,000,000,000 threshold is indeed a first-ever accomplishment.  We tracked $390M of investment into the sector in 2008 and then did not track this data for 2009-11 inclusive.

Based on everything we know, we believe this is almost certainly the first time the sector has raised over one billion dollars. 

Hope that helps.

--Lee

Cell Therapy HiLites 2008-11-21

This is a week in which 2 of GEN's top 7 News of the Week stories were about regenerative medicine and they weren't even the two big financing events. Not bad.

Good news for Tissue Genesis Inc and their Commercialization Consortium partners Bioheart and VetStem. Effective immediately, the Tissue Genesis Cell Isolation System will be available to the European marketplace.

In a piece about biotech survival, Luke Timmerman, now of Xconomy.com, reports that according to an October report by Eun Yang, an analyst with Jeffries & Co., "about half of the 248 unprofitable biotechs that are publicly traded have less than a year’s worth of cash on hand".

Dr. Michael D. West announced an open letter to President-Elect Obama signed by 22 scientists and economists (including 19 Nobel laureates), urging the new Administration to make regenerative medicine, specifically, the cure of human disease, a national priority, similar in scope to the Kennedy Administration’s commitment to land a man on the moon within that decade.

Aldagen announced positive phase 1/2 results for ALD-301 (an autologous, bone marrow-derived stem cell population expressing high levels of ALDH) for critical limb ischemia.

The story everyone loved this week was the new trachea built from autologous stem cells and effectively transplanted in Spain. Chalk one up for more proof-of-principle but more consternation on the "business models" side of things. Researchers and surgeons from Britain, Italy and Spain collaborated to grow tissue from Ms Castillo’s own bone marrow stem cells, using them to fashion the new bronchus – a branch of the windpipe. Details of the transplant, performed by Paolo Macchiarini, at the Hospital Clinic of Barcelona, are published online in The Lancet and discussed in accompanying commentary. First a section of trachea was taken from a donor and stripped of cells that could cause an immune reaction, leaving a grey trunk of connective tissue. Stem cells were then taken from Ms Castillo’s bone marrow and grown in Professor Birchall’s laboratory to cover the 7cm graft. It was then “seeded” with the new cells using a process developed in Milan. Finally the trachea, covered in cartilage and lined with epithelial cells, was cut to shape and fitted. The researchers said that the surgery could help some patients in Britain but admitted that the procedure was too expensive to be widely available. They are seeking EU funding and commercial sponsors for trials to create and transplant a larynx, an operation that could be more cost-effective.

The two stories I loved the most this week were finance-related.

Last week Stem Cells Inc. announced its intention to raise $20M gross and this week it closed the deal netting $18.5 million from institutional investors.

Not to be outdone, Tengion raised $21 million in a second close of its Series C adding Safeguard Scientific to its heady roster of investors.

What money does exist for investing in cell therapies appears to be increasingly focused on a handful of companies that have demonstrated a somewhat mysterious capability to ease money from investors. Stem Cells, Inc and Tengion are two of the best along with MolMed in Italy which netted around $76M in an IPO earlier this year. Osiris has also done well on the public markets but also through the undying commitment of Peter Friedli and timely deal-making. Notable mention should also go to Aldagen (despite them having to recently pull a planned ~$80M IPO), Novocell, Geron, and Dendreon who all have done well in the past with investors.

This trend for capital congregation is nothing new. It certainly supports popular notions that either investors all think the same or they are lemming-like in their movements. It certainly does not bode well for the plethora of companies out there that are on the brink of burnout despite having seemingly strong management and data but do not seem to have that same type of investor-attracting charisma as the likes of Weissman/McGlynn, Nichtberger, Bordignon, Mills, Lewis, Okarma, or Gold.

At the end of the day, a company's success almost always comes down to its rainmaker. This is not a "if-you-build-it-they-will-come" type of industry. Great science, technical prowess, manufacturing experience, or even business acumen will not get companies over the threshold without that someone with that somewhat magic prowess to relieve investors of their money. Many cell therapy companies are now learning that lesson.

In the interim, from a mere objective point-of-view I could argue it's not a bad thing that investors focus precious resources on a few companies' products, get them approved, and get some fresh upticks in the "precedent" column for cell therapies and the new therapeutics and business models they represent. Like lawyers - and perhaps its because there are so many law degrees in the halls of VC firms - nothing makes them more comfortable than precendent.

That's just the way I saw cell therapy this week...

Cell Therapy Market Overview

Below is my snapshot of the cell therapy sector and year-to-date activity - investments, business activity, and market size - that I just posted on docstoc and on my website. It's a very basic status overview of the business side of the industry. There is much more detail behind these summary slides but I can't give away everything now can I? :)


Cell Therapy Business-Market Summary (July 2008)

-- Lee Buckler
the Cell Therapy Group