The Funding Spree for Neuroscience Startups
Venture capital, angel investors, and big pharma betting big on neuroscience.
Posted Oct 30, 2018
In recent news, neuroscience startups are receiving multi-million dollar investments. Neuroscience is an interdisciplinary study of the brain and nervous system. According to the University of California San Francisco Medical Center, there are over 600 diseases of the nervous system. By 2050, the number of people aged 60 years or over is expected to grow to 2.1 billion globally, according to 2017 estimates by the United Nations. With an aging global population, there is an anticipated rise in neurological disorders and diseases, such as Alzheimer’s, Parkinson’s, ALS (Amyotrophic Lateral Schlerosis or Lou Gehrig’s disease), stroke, neuropathy, epilepsy, and other forms of dementia. A number of pioneering companies and investors are addressing the growing problem of neurodegenerative diseases with large monetary bets.
In October 2018, pharmaceutical giant Pfizer and private-equity firm Bain Capital LP announced the formation of Cerevel Therapeutics LLC, a drug-discovery collaboration for central nervous system disorders. Pfizer plans to contribute a portfolio of pre-commercial neuroscience assets to the venture, including preclinical compounds for addiction, Alzheimer’s, schizophrenia, epilepsy, and Parkinson’s. Bain made an initial investment commitment of $350 million to Cerevel Therapeutics LLC and plans to fund any additional needed capital in the future. This is just ten months after Pfizer announced plans in January 2018 to invest one-quarter of its $600 million venture capital fund for investments in neuroscience, with 80 percent of investments in the United States. Pfizer aims to invest $150 million in biotech startups focused on neurometabolic disorders, neurodegeneration, and neuroinflammation.
Alector, a startup biotech focused on Alzheimer’s disease, raised $133 million in a Series E round in July 2018 that included AbbVie Ventures, Amgen Ventues, Dementia Discovery Fund, OrbiMed, Google Ventures, and other participants. The company has over $400 million in funding, including past investments from Janssen Pharmaceuticals (Johnson & Johnson), and Merck, among other investors.
Neuroscience startup Verge Genomics, led by CEO Alice Zhang, raised $32 million in its Series A funding led by DFJ in July 2018, with participation from the OS Fund, ALS Investment Fund, and WuXi AppTec’s venture fund. Verge Genomics uses machine language (a subset of artificial intelligence) to facilitate drug-discovery for neurodegenerative diseases such as Alzheimer’s.
In July 2018, Bill Gates, Leonard Lauder, the Charles and Helen Schwab Foundation, the Dolby family, and other philanthropists announced that they are investing millions in the Diagnostics Accelerator, a venture philanthropy focused on Alzheimer’s disease research. Diagnostics Accelerator plans to provide $30 million in research grants worldwide to create early diagnostic tests and discover new biomarkers for Alzheimer’s.
Less than a year prior, in November 2017, Bill Gates made a personal funding commitment of $100 million towards Alzheimer’s research—half of the funds will go to the venture capital fund called the Dementia Discovery Fund (DDF), and the remaining $50 million will be invested in startups that are taking innovative, unconventional approaches towards treatment for dementia. The DDF was founded in 2014 and has backers that include the AARP, the NFL Players Association, U.K. government’s Department of Health, Alzheimer’s Research UK, Neil Woodford, Biogen Idec, Takeda, Johnson & Johnson, Eli Lilly, Pfizer, and GlaxoSmithKline. As of June 2018, the DDF has $350 million in funds and a portfolio of 16 investments focused on early intervention and treatment for dementia.
The late billionaire philanthropist Paul Allen invested $500 million in the Allen Institute for Brain Science, a Seattle-based non-profit that he founded in 2003, with the purpose of accelerating our understanding of the human brain. In 2017, researchers at the Allen Institute for Brain Science, UW Medicine and Kaiser Permanente Washington Health Research Institute published research with detailed neuropathological, molecular, and transcriptomic characterization of 107 aged human brains. The findings are publically available at the Allen Brain Atlas portal.
The global neuroscience market is projected to reach $30.8 billion by 2020 according to Grand View Research. Venture capitalists, angel investors, and pharmaceutical companies are making significant investments in neuroscience startups in hopes of discovering methods for early disease detection, innovative treatments, and even potential cures for brain-related diseases and disorders in the future.
Copyright © 2018 Cami Rosso All rights reserved.
United Nations. “Ageing.” Retrieved on 10-30-2018 from http://www.un.org/en/sections/issues-depth/ageing/
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Grand View Research, Inc. (Oct 14, 2015).”Neuroscience market Size to Reach $30.8 Billion by 2020: Grand View Research, Inc. [Press Release]. Retrieved 10-30-2018 from https://www.prnewswire.com/news-releases/neuroscience-market-size-to-reach-308-billion-by-2020-grand-view-research-inc-532637711.html