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Oncology may continue be one of the hottest sectors across the pharma sector, but other therapeutic areas are catching up in terms of innovation and investment. While oncology and hematology jointly accounted for about one-third of the new FDA approvals in 2023, investors are increasingly betting on precision medicine, advanced drug delivery systems and the use of AI and machine learning for drug discovery and development.
The shift is not entirely new. In a report from late 2023, McKinsey also notes ML-enabled drug discovery, cell therapies, and gene editing continue to attract significant funding, making up over two-thirds of biotech VC deals in 2022, constituting $15.5 billion in total. The consultancy also noted that immunology had displaced oncology as the hottest therapeutic area for asset-based biotech investments, also citing allogeneic cell therapies and large-scale gene editing as hot investor areas.
Toolmakers, AI beneficiaries in biotech’s $3B venture haul
A recent survey of Crunchbase data from the past 90 days as of January 2024 revealed substantial venture funding in biotechnology sectors, with over $3.18 billion raised across 128 companies. (Not all companies have disclosed funding totals.)
Biotechnology led with roughly $1.2 billion total funding and $22.7 million average per company. Biopharma was next in line with $1.05 billion total and a $55.16 million average. Other leading areas included TechBio/Digital Health & AI with $549 million total ($39.22 million average). Finally, other biotech sectors followed with $266 million total ($24.24 million average), and research tools and platforms rounding out the top five with $115 million total and a $38.49 million average raise per company.
Unveiling up-and-coming biotech trailblazers
Analyzing the top companies by funding reveals five companies that stood out from the rest. These include an international assortment of companies. While their focus areas range from oncology to respiratory diseases to shipment monitoring, a few common threads emerge in examining their aims to push boundaries in their respective sectors.
- Apollo Therapeutics: With $397.85 million in total funding, Apollo Therapeutics employs a “hub-and-spoke” approach in drug development. Their model centers around an experienced centralized management team that oversees a diverse portfolio of therapeutic programs, each led by an asset leader and housed in separate wholly-owned subsidiary companies. It has more than 20 programs in development in its core areas of biological focus cell signaling, cell stress response and immunology. The company headquartered in Boston, but also has significant operations in Cambridge, UK.
- Aiolos Bio: Having launched in October 2023, Aiolos Bio has already amassed $245 million in funding. The biotech company specializes in developing therapies for patients with severe respiratory diseases. Its lead drug candidate, AIO-001, is for moderate-to-severe asthma. The company plans on using its funding haul to advance clinical trials and explore further therapeutic applications in respiratory and inflammatory diseases. Aiolos Bio is based in San Francisco.
- NMD Pharma: With $171.48 million in total funding, NMD Pharma specializes in developing novel treatments for neuromuscular disorders. Founded in 2015 and headquartered in Aarhus, Denmark, it focuses on the novel use of small molecule inhibitors targeting the skeletal muscle chloride ion channel (ClC-1). This approach aims to enhance neuromuscular transmission and improve muscle function in various neuromuscular diseases. The company plans to expand its pipeline of ClC-1 inhibitor molecules and explore treatments for other neuromuscular diseases.
- SkyCell: SkyCell, founded in 2013 and based in Zürich, has secured total funding of $97 million. It specializes in developing temperature-controlled containers for airfreighting temperature-sensitive pharmaceutical products. It has developed a shipment monitoring system for precise temperature and geolocation tracking, and a platform to detect temperature deviations and systematic risks.
- Nouscom: It may be an oncology company, but it has carved out a unique focus area by targeting cancer neoantigens to enhance tumor-specific immune responses. Having attracted $135.77 million in total funding, Nouscom has developed a platform that includes both an off-the-shelf immunotherapy for tumors with mismatch repair deficiency and a rapid personalized neoantigen vaccine tailored to individual patient mutations. Nouscom is also developing next-generation targeted oncolytic viruses designed to selectively infect and kill cancer cells, delivering immune-modulatory molecules that bolster immune responses and treatment efficacy. Nouscom is headquartered in Basel, Switzerland.