‘Science doesn’t care’ about markets: Arch raises nearly $3B amid tough times for biotechs

‘Science doesn’t care’ about markets: Arch raises nearly $3B amid tough times for biotechs

Arch Venture Partners is out to prove there’s still money for the taking for up-and-coming biotechs, raising nearly $3 billion for its latest fund amid a tumultuous bear market.

The company was relatively vague on what the money for its twelfth fund would be used for, saying Wednesday that it would be allocated towards early-stage companies focused on “breakthrough technologies.”

The latest fundraising sum is roughly $1 billion more than the company’s last haul from January 2021, when the company raised nearly $2 billion. The latest figure seems all the more impressive when you consider that a recent CB Insights report found that investments, deals and M&A were all down in the first quarter of 2022. The S&P Biotech ETF is also down 55% since peaking just after Arch’s January 2021 haul, from more than $166 per share to just $74 today.

In a statement, Arch Co-founder and Managing Director Robert Nelsen said, “Science doesn’t care what markets are doing, and science moves forward.”

Even though the market downturn began in early February 2021, venture capital, operating on a delay, continued to skyrocket. 2021 ended up being a record-setting year for fundraising, with private companies eclipsing 2020’s record by 26% with $28.5 billion recorded. Arch played a significant role in that haul.

The firm helped lead or contribute to a number of companies’ fundraising rounds, including chromosomal instability-focused Volastra Therapeutics, Be Biopharma and Pheast Therapeutics. Nearly a year after closing its seed round, Volastra signed onto a biobucks-heavy partnership with Bristol Myers Squibb with a $1.1 billion ceiling in exchange for three targets.

But a company as involved as Arch has not been immune to the market’s woes or clinical failure. Gossamer Bio, one of the firm’s investments, has seen its shares fall 46% since October, due in part to a phase 2 flop of its ulcerative colitis med. Shares of another Arch-backed company, Verve Therapeutics, have fallen more than 59%, from just over $38 per share shortly after closing its IPO to around $15.50.

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