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Immunocore’s Record Fundraising Could well be Just the Tip of the Iceberg in Europe’s Biotech Sector

Jul 20, 2015 | Healthcare | Christina Johnsan

The US led biotech investment wave has finally caught on in Europe, with Immunocore, an Oxford-based cancer drug developer, raising a record US$ 320 Mn in what is being valued as the biggest fundraising by a European biotech company. Immunocore’s fundraising is next only to the US$ 450 Mn raised by Moderna Therapeutics, a pioneer in messenger RNA (mRNA) drugs.

Venture capitalists are betting big on biotech companies like Immunocore, one among a slew of life science companies engaged in developing cancer drugs that use the body’s immune system for destroying tumours. Immunotherapy is being touted as a potent treatment option for cancer, with trials conducted by Pennsylvania University showing marked improvement in terminal patients.

Immunocore is not alone in cashing in on the frantic investment activity in European biotech companies. Cell therapy firm Reneuron plc is anticipated to increase its capital by US$ 106 Mn in the near future. Celyad SA, of Belgium, took in US$ 100 Mn after it was listed on Nasdaq, whereas anticalin developer Pieris Pharmaceuticals AG raked in US$ 25 Mn in an IPO in June, 2015. Other notable names include Kiadis Pharma BV, of Amsterdam (US$ 35.43 Mn) and Mithra Pharmaceuticals SA (US$ 78.33 Mn).

Although Europe’s biotech sector has grabbed international headlines after Immunocore’s record fundraising, public financing of biotech companies in Europe has been on an upstream since the turn of the century. The sector raised US$ 3.3 Bn, and another US$ 2.65 Bn in follow-on and other offerings in the year 2000. The private fundraising this year has already reached US$ 1.71 Bn, and considering the investor interest, the sector might be looking at a new high this year.

Getting their IPO across the Atlantic and listing it on Nasdaq seems to a be a popular move among European biotech companies. Over 20 life science companies have listed themselves on Nasdaq in a bid to raise capital in the booming biotech index in Nasdaq.

Paris-based DBV Technologies raised nearly US$ 93 Mn after listing on Nasdaq in October, 2014. Adaptimmune of the UK and Galapagos of Belgium are the other notable European life science companies to have listed on Nasdaq recently. Owing to rising interest among venture capitalists and retail investors in the global biotech sector, the Nasdaq Index has more than doubled in value in the last two years.

Loosening of rules governing capital raisings and specialist investor knowledge about the biotech sector are the key reasons why European biotech companies prefer to raise funds in the US. A majority of venture capitalists in the US are hunting for assets that have the potential to grow at a high rate, even if the assets carry an increased level of risk. Breakthroughs in immunotherapy from smaller companies have made biotech companies more appealing for investors.

Considering the heightened interest in the European biotech sector by global investors, the Immunocore fundraising seems only the tip of the iceberg, and the sector might see more jaw-dropping fundraising in the future.