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Investors Raise $1.85B for Biotech Start-Ups

Investing monitor

(Lorenzo Cafaro, Pixabay)

28 Jan. 2021. A venture capital company investing in life science and health care businesses raised $1.85 billion to finance biotechnology start-ups. ARCH Venture Partners, in Chicago, says its ARCH Venture Fund XI plans to support new companies developing therapies and diagnostics for a wide range of health care needs, including mental health, as well as health care management and delivery technologies.

ARCH Venture Partners invests in early-stage companies based on research in the life sciences and engineering, commercializing findings from academic labs, national labs, and corporate partners. The company says it makes investments of all sizes in new life science technologies commercialized by start-up companies. “While Fund XI is our largest to date,” says ARCH co-founder and managing director Robert Nelsen in a company statement, “we have always invested at levels that each company or technology needed to advance, whether it’s $50,000 or $250 million.”

The fund aims to support companies commercializing research in infectious diseases, mental health, immunology, oncology, neurology, and anti-aging medications. ARCH also expects to fund technologies that change the way medical research is conducted, such as genomic and biological tools and data sciences. And because of the pandemic, ARCH aims to finance companies that offer innovations in drug manufacturing and distribution, as well as improve the management of health care professionals to prevent burnout, and deliver better mental health services.

“Particularly in the midst of the ongoing pandemic,” notes ARCH managing director Kristina Burow, “companies that can bring cutting-edge medicines and tools forward are both clearly important and good investments. Now more than ever, we have a sense of urgency and purpose to back companies that could meaningfully change medicine for the better.”

Interest in biotech manufacturing and distribution

As reported by Science & Enterprise in November 2020, a new ARCH-funded company exemplifies its recent interest biotech manufacturing and distribution. Resilience — officially National Resilience, Inc. — in San Diego and Boston plans to fill critical gaps for delivery of new biologic therapies to the public, namely in manufacturing and distribution.

Resilience says its services can support recent advances in biotechnology, such as cell and gene therapies, viral vectors, vaccines, and proteins. The company’s services, says Resilience, include manufacturing of gene-editing therapies and vaccines, with formulations that require temperature stability. ARCH Venture and 8VC founded Resilience and raised $800 million in the company’s first two funding rounds.

An example of a smaller deal led by ARCH Venture Partners is Nutcracker Therapeutics Inc. in Emeryville, California. Nutcracker develops messenger RNA, or mRNA, biologics from single-use biochips that provide semiconductor-like control over discovery and manufacturing capabilities for vaccines or therapies. The two Covid-19 vaccines currently authorized by the Food and Drug Administration are based on mRNA. In September, ARCH led Nutcracker’s second venture funding round raising $60 million.

ARCH Venture Fund XI follows its Fund X and Fund X Overage totaling $1.46 billion, announced in April 2020. Like Fund XI, Fund X and X Overage support early-stage companies developing health care technologies, with Fund X Overage expected to take part in fewer deals, but with higher dollar amounts.

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