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A Fragmented Regulatory Landscape is No Thorn for EU Healthcare Growth

Wesley Johnson
25 April 2022
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Phacilitate’s Wesley Johnson explores more top deals from the past month or so in the latest instalment of his investment blog series.  

A fragmented regulatory landscape can be a great concern for investors and businesses that wish to work internationally. Regulatory fragmentation can slow down, hinder, or even halt, important research and innovation [1].

In particular, European health policy is premised on the member states having the sole national responsibility for their own health policy-making, administration of their national healthcare system, and the financing and scope of services [2]. Unfortunately, an adhocracy structure like this can lead to regulators having different approaches to the same issue and will be inconsistent in interpreting international regulations which can result in the duplication of regulatory mechanisms.

Surprisingly, this has not deterred investment appetite within the EU Healthcare space. On the contrary, the EU is now being seen as the fastest growing region for the healthcare tech industry, according to a report from London & Partners and Dealroom [3].

So What’s Driving the Appetite?

The EU boasts a plethora of benefits for investors including the likes of; attractive asset valuations, competitive operational costs, a leading technology hub, and pools of talent. However, according to a recent article by S&P Global, traditional barriers to entry such as the regulatory environment have now also become more conducive for investments [4]. Research suggests that the FDA seems to be more accessible and open-minded than it used to be. A good example of this is Europe and Germany, with regards to the Digital Care Act and the openness of the FDA to speed up the approval process. Furthermore, it’s been noted that investors are now seeing an increase in their portfolio companies engaged in breakthrough designation-discussions with the FDA.

Further to the above, an article by Linklater’s highlighted that as a result of COVID-19, governments and regulators are continuing to look closely at healthcare regulation, seeking to address weaknesses revealed by the pandemic, including dependencies on third countries and security of supply. As a result, this is encouraging continued policy development [5].

Returning to the monthly round-up, below I have highlighted a series of the industry’s top transactions for the month of March.

Europe

  • Oxford Biomedica to Raise $53.3 Million in Private Placement of Shares

Oxford Biomedica has agreed to issue 5,018,134 new ordinary shares, at an issue price of £8.10 per share, for gross proceeds of £40.6 million. Peel Hunt and WG Partners are acting as joint book runners on the transaction. | Read more >>

  • Brenus Pharma Raises $40.4 Million in Seed Financing

Brenus Pharma SA, a developer of anti-cancer cell based immunotherapy, has raised EUR4 million in seed financing. The company intends to use the funds to support pre-clinical studies of the first candidate which will target metastatic colorectal cancer. | Source: GlobalData April 2022

  • Ilya Pharma Raises $9.3 Million in Venture Financing

Ilya Pharma, a pharmaceutical company, has raised €8.5 million in venture financing. The finance was provided by EIC Fund, with participation from an international consortium of family offices and private investors. The company intends to use the proceeds to advance the company’s portfolio of three first in class immunotherapies for skin and mucosal diseases. | Read more >>

North America

  • Rocket Pharma to Raise up to $200 Million in Public Offering of Shares

Rocket Pharmaceuticals, Inc., a clinical-stage company advancing an integrated and sustainable pipeline of genetic therapies for rare childhood disorders, has entered in to a sales agreement with Cowen and Company, LLC, for public offering of common stock for aggregate gross proceeds of up to $200 million. Rocket Pharma intends to use the net proceeds from this offering to fund the further development of its pipeline of gene therapies for rare diseases. | Source: GlobalData April 2022

  • Intellia Therapeutics to Raise up to $400 Million in Public Offering of Shares

Intellia Therapeutics Inc, a clinical-stage genome editing company, has entered into an open market sale agreement to offer and sell shares of its common stock in a public offering, to raise gross proceeds of up to $400 million. The company intends to use the proceeds to fund research and clinical development of current or additional pipeline candidates, the continued expansion of modular platform through internal development and potential acquisition, working capital, capital expenditures and general corporate purposes. | Read more >>

  • Brooklyn Immuno Therapeutics Raises $12 Million in Private Placement of Units

Brooklyn ImmunoTherapeutics Inc, a biopharmaceutical company, has completed the private placement of 6,857,142 units, at a price of $1.75 per unit to the investor, for gross proceeds of $12 million. The company intends to use the proceeds for general working capital purposes. | Read more >>

  • Vor Biopharma to Raise up to $125 Million in Public Offering of Shares

Vor Biopharma, a clinical-stage cell and genome engineering company with a vision to cure blood cancers through cell and genome engineering, has announced to raise $125 million in public offering of shares. The company intends to use the proceeds for working capital, capital expenditures, general corporate purposes and to invest in or acquire businesses or technologies. | Source: GlobalData April 2022

  • Vor Biopharma Files Registration Statement to Raise up to $350 Million in Public Offering of Securities

Vor Biopharma, a clinical-stage cell and genome engineering company with a vision to cure blood cancers through cell and genome engineering, has filed a registration statement with US Securities and Exchange Commission (SEC) for the public offering of securities for the gross proceeds of up to $350 million. The company intends to use the proceeds for working capital, capital expenditures, general corporate purposes and to invest in or acquire businesses or technologies.

  • Sensei Biotherapeutics to Raise up to $50 Million in Public Offering of Shares

Sensei Biotherapeutics, Inc, a clinical-stage biopharmaceutical company developing precision immuno-oncology therapies, has entered into an open market sale agreement to offer and sell shares of its common stock in a public offering, for gross proceeds of up to $50 million. The company intend to use the net proceeds from the offering primarily to fund the research and development of product candidates and for working capital and general corporate purposes. | Source: GlobalData April 2022

  • 2seventy bio to Raise $170 Million in Private Placement of Shares

2seventy bio, Inc., an immuno-oncology cell therapy company, has agreed to sell approximately 13,934,427 shares at a price of $12.20 per share of its common stock to a select group of institutional and accredited investors in a private placement, to raise gross proceeds of approximately $170 million, before payment of offering commissions and expense. The company intends to use the proceeds to support 2seventy bio’s ongoing research and development activities as well as general corporate purposes and working capital. Goldman Sachs & Co. LLC acted as the exclusive placement agent. | Read more >>

  • Triumvira Immunologics Raises $45 Million in Extension of Series A Financing

Triumvira Immunologics, a clinical-stage company developing novel, targeted autologous and allogeneic T cell therapeutics, announced the completion of an extension of its Series A financing, bringing the total round to approximately $100 million. The proceeds of the financing will support the continued preclinical and clinical development of Triumvira’s T Cell Antigen Coupler (TAC)-T cell therapy programs. | Read more >>

  • iTolerance Raises $17.1 Million in Private Placement of Convertible Notes

iTolerance Inc, a regenerative medicine company developing technology to enable tissue, organoid or cell therapy, has completed the private placement of convertible notes, for gross proceeds of approximately $17.1 million. The company intends to use the proceeds to translate the production of iTOL-100 from the academic labs to commercial manufacturing for use in its planned pre-clinical and clinical trials and for other general corporate purposes. | Read more >>

  • Affini-Therapeutics Raises $175 Million in Venture Financing

Affini-T Therapeutics, Inc, a biotechnology company unlocking the power of T cells against oncogenic driver mutations, has raised $175 million in venture financing. The company intends to use the funds to operationalize its platform discovery engine and seek to drive multiple oncogene driver programs into the clinic while pursuing complementary technology licenses to bolster its cell therapy platform. | Read more >>

Asia-Pacific

  • Suzhou Regend Therapeutics Raises $15.8 Million in Series B Financing

Suzhou Regend Therapeutics Co Ltd, a company focuses on the R&D and production of stem cell therapy products and the business of human organ regenerative medicine, has raised CNY100 million in Series B financing. The round of funds is mainly used to advance two clinical trials of its first-in-class cell drug REGEND001 for respiratory diseases, complete the IND application for renal regenerative medicine products, accelerate the development of the follow-up “gene-enhanced cell” product pipeline, and complete Nanchang Commercial Construction of chemical production sites. | Read more >>

  • Nanjing Kati Medical Technology Raises $11.1 Million in Series A+ Financing

Nanjing Kati Medical Technology Co Ltd, a cutting-edge domestic solid tumor CAR-T cell therapy company, has raised CNY70 million in series A+ financing. The round of financing was jointly completed by Nanjing Chengyi Investment and Joint Road Group, Suzhou Guanya Investment and Haihui Investment. The round of financing will be mainly used to promote the IND application of Kati Medical’s lead products. | Source: GlobalData April 2022

Conclusion

It’s evident that the EU still have a few yards to go to achieve an optimal framework that seeks to encourage efficiencies and effective delivery for the healthcare industry. However, with the plethora of new businesses and talent entering the market, and the FDA currently practicing an open-door policy, the EU healthcare space seems to be witnessing a delightful sunrise on the horizon.

References

[1] www.nature.com/articles/s41599-021-01015-1
[2] www.bundesgesundheitsministerium.de/en/international/european-health-policy.html
[3] https://dealroom.co/uploaded/2022/01/Dealroom-London-report-2022-Jan.pdf
[4] www.spglobal.com/marketintelligence/en/news-insights/latest-news-headlines/pe-investors-see-opportunity-of-a-generation-in-eu-healthcare-it-63030868
[5] https://lpscdn.linklaters.com/-/media/digital-marketing-image-library/files/01_insights/publications/2020/july/linklaters_covid-19_-impact-on-healthcare-regulation_july-2020.ashx?rev=27914c3c-e971-4c37-9cc0-e396adbebe85&extension=pdf