Forbes' Top 7 Global Biotech Investors Shine on Midas List 2016 Amid Sector Boom

For years, venture capitalists who provide seed funding to small biotechnology companies have struggled to achieve the same level of “success” as their counterparts in the technology sector. The biotechnology field, particularly drug development, is characterized by long timelines and high costs, which typically result in lower financial returns.

However, this year, biotechnology investors have made their voices heard in the “Oscars” of the investment world—the Forbes Midas List (The World’s Smartest Tech Investors 2016). A total of seven biotech venture capitalists made the list this year, an increase of two from last year. Most importantly, their rankings are higher than ever before.

The biotechnology stock market, along with a boom in mergers and acquisitions, has driven this outstanding performance. Below are seven biotech investors selected by Forbes.com for inclusion in the Global Top 100 Venture Capitalists list:

Robert Nelson

Company: ARCH Venture Partners

Ranking: 16

Selected Related Investments: Illumina, Juno, Agios, Kythera

Over his 30-year career, Robert Nelsen has taken more than 20 portfolio companies public. He was an early investor in Illumina and Aviron. Some of Nelsen’s recent successes include Kythera, a developer of treatments for submental fat (double chin), which was acquired by Allergan for $2.1 billion last June; Juno Therapeutics, a leader in immune cell therapy with a current market capitalization of $4 billion; and Agios Pharmaceuticals, which focuses on developing drugs that target tumor metabolism. Additionally, he has invested in Denali, a company dedicated to developing therapies for Parkinson’s disease and Alzheimer’s disease, as well as Grail, a spin-off from Illumina that is developing blood tests for the detection of multiple cancer types. Reportedly, Grail represents ARCH Venture Partners’ largest investment to date.



Carl Gordon

Company: OrbiMed

Ranking: 20

Selected Related Investments: Acerta Pharma, Seragon Pharmaceuticals, Aragon Pharmaceuticals

Carl Gordon was named “Investor of the Year” this year, largely thanks to AstraZeneca’s (AZ) acquisition of Acerta Pharma. Late last year, AZ announced it would acquire a 55% stake in Acerta for $4 billion, with an option to purchase the remaining equity in Acerta Pharma for an additional $3 billion. Acerta currently has no commercialized products and focuses primarily on developing therapies for cancer and autoimmune diseases; its investigational BTK inhibitor, acalabrutinib, has been granted orphan drug designation by the FDA for the treatment of mantle cell lymphoma. Other recent achievements by Carl Gordon include participating in Series A financing for Seragon Pharmaceuticals in 2013; the company was sold to Roche in 2014 for $1.725 billion ($725 million in cash plus $1 billion in milestone payments). In 2013, he also participated in the investment in cancer drug developer Aragon Pharmaceuticals, which was acquired by Johnson & Johnson for $1 billion. In 2000, Carl Gordon helped Orbimed launch its venture capital business, which has since grown into the world’s largest life sciences investment firm.



Bryan Roberts

Company: Venrock

Ranking: 48

Selected Related Investments: Ariosa Diagnostics, Intarcia Therapeutics

Bryan Roberts has appeared on this list six times. His portfolio company, prenatal testing firm Ariosa Diagnostics, was acquired by Roche in December 2014. His current investments also include Intarcia, a company developing devices for the treatment of type 2 diabetes, which is currently valued at $5.5 billion. Intarcia’s drug candidate, ITCA-650, is a subcutaneously implanted micro-pump. This matchstick-sized osmotic pump provides continuous delivery of the GLP-1 agonist exenatide to lower blood glucose levels in diabetic patients, with its most notable feature being that it requires administration only once a year.



Jim Tananbaum

Company: Foresite Capital

Ranking: 54

Partial Related Investments: Intarcia, Puma Biotechnology, Juno, Aimmune

Jim Tananbaum has appeared on this list for two consecutive years, largely thanks to his investments in Intarcia Therapeutics and Puma Biotechnology. His investment portfolio also includes Juno Therapeutics and Aimmune Therapeutics, a company dedicated to developing immunotherapies for food allergies. Not long ago, Aimmune announced that AR101, its novel drug candidate for treating peanut allergy, demonstrated favorable results in the latest clinical study, thereby clearing the path for Phase III clinical trials. Currently, Tananbaum is actively expanding his investments in the field of cancer therapy.



Jonathan Silverstein

Company: OrbiMed

Rank: 63

Partial Related Investments: Glaukos, Avanir Pharmaceuticals, Arteaus Therapeutics

Jonathan Silverstein co-heads OrbiMed’s private equity fund. He joined the firm in 1999, with successful investments including Glaukos (IPO 2015), Avanir Pharmaceuticals (acquired by Otsuka for $3.5 billion in 2014), Relypsa (IPO 2013), Arteaus Therapeutics (whose migraine drug was acquired by Eli Lilly in 2014), Enobia (acquired by Alexion for $1.08 billion), and superDimension (acquired by Covidien for $300 million).



James Topper

Company: Frazier Healthcare Partners

Ranking: 91

Partial related investments: Acerta Pharma B.V., Calistoga Pharmaceuticals

James Topper makes his debut on this list. A passionate advocate for medicine and science, he serves as Managing General Partner at Frazier Healthcare Partners. He participated in the Series A financing of Acerta Pharma B.V. and co-founded Calistoga Pharmaceuticals, which was acquired by Gilead in 2011.



Beth Seidenberg

Company: Kleiner Perkins Caufield & Byers

Rank: 98

Selected Related Investments: Flexus Biosciences, Ipierian

Dr. Beth Seidenberg is an expert in the biotechnology sector, having invested in Flexus Biosciences (a cancer immunotherapy company), Ipierian (a neurobiotechnology company), and Practice Fusion (a health records company). Prior to joining Kleiner Perkins, she held positions at Amgen, Bristol Myers Squibb (BMS), and Merck. In February 2015, BMS announced its agreement to acquire Flexus Biosciences in a deal valued at up to $1.25 billion. Founded in 2013, Flexus focused on developing small-molecule cancer immunotherapies targeting regulatory T cells.



Peter Thiel

In fact, in addition to the seven investors selected by Forbes, Peter Thiel, who ranks 10th on the overall list, should now also be considered a figure in the biotechnology circle. The profile of him on the list includes co-founder of PayPal, early investor in Facebook, co-founder of Palantir (a big data company backed by the CIA), and head of Founders Fund. In fact, he is also the author of the best-selling book Zero to One.

Last September, an article titled “Peter Thiel Backs Biotech ‘Unicorn’ Fighting Cancer Stem Cells” was published on the MIT Technology Review website. The article noted that Peter Thiel’s fund invested $200 million in Stemcentrx, a biotechnology company dedicated to cancer stem cell research, marking the fund’s largest single-company investment in its history.

Not long afterward, Thiel gave an interview to MIT. When asked, “What are the challenges in investing in biotechnology companies?” he said, “There is a major difference between software and biotechnology: software does what you tell it to do, but biological research does not. One challenge facing biotech research is that life sciences are extremely complex and highly stochastic. Too many unexpected factors lead to research failures. For example, you may conduct a small study and obtain promising results. However, there are five additional studies that follow, each of which must also yield positive outcomes.”

According to Caixin, Peter Thiel stated in a speech at Tsinghua University on March 25 that future globalization will be less pronounced than it is today, with countries placing greater emphasis on consumption, and that the next technological industrial revolution will occur in the field of life sciences. Thiel expressed his personal optimism about biotechnology, noting that many challenges—such as extending human lifespan, curing cancer, and improving quality of life—require technological advancements for resolution. He remarked, “Even if progress in this field is somewhat slow, I believe significant breakthroughs are imminent.”

It is reported that Peter Thiel co-founded Founders Fund, which provided early-stage funding to more than a dozen outstanding tech startups, including LinkedIn, SpaceX, and Yelp. He established the Thiel Fellowship to encourage young people to pursue learning and entrepreneurship outside of traditional academic settings, as well as the Thiel Foundation, which promotes technological advancement and long-term thinking about the future.

Source: Bioon

 

Robert Nelsen