Fusion Pharmaceuticals, a cancer radiotherapeutics specialist, raised $140 million (US$105 million) in a Series B financing, one of the largest Canadian biotech deals on record.
Varian Medical Systems, a Silicon Valley oncology business, co-led the round with New York healthcare investment giant OrbiMed.
Perceptive Advisors, Pivotal bioVenture Partners and Rock Springs Capital also invested, as did Fusion’s existing backers Adams Street Partners, FACIT, Genesys Capital, HealthCap, JJDC, Seroba Life Sciences and TPG Biotech.
Varian’s Deepak Khuntia, OrbiMed’s Chau Khuong and Pivotal’s Heather Preston will join the board.
The Series B is Fusion’s second funding milestone since it was founded in 2015. In all, the Hamilton, Ontario, company has secured more than $200 million.
‘A smart bomb for cancer’
Fusion is the brainchild of CEO John Valliant, a professor of chemistry and chemical biology at McMaster University. Prior to launching the business, he worked with a team for several years to develop its targeted alpha-therapeutics platform.
The platform uses technology to link targeting molecules, such as antibodies, with short-path alpha medical isotopes to kill cancer cells. The resulting alpha treatment promises greater precision of delivery and safer outcomes than conventional radiation drugs.
“It’s essentially a smart bomb for cancer,” Genesys Managing Director Damian Lamb told PE Hub Canada.
Lamb met Valliant in 2008 and was invited to join the board of the government-funded Centre for Probe Development and Commercialization, where Fusion was born.
Impressed by Valliant’s “very different approach to cancer radiotherapeutics,” he provided advice and support throughout Fusion’s evolution. This included the company’s spinout from the Centre and Series A financing, closed in 2017.
Now its chair, Lamb says Fusion is ready to leverage the positive results of initial testing and those expected from clinical trials begun earlier this year with patients with advanced solid tumors.
Fusion plans to expand its clinical program and advance a pipeline of drug products addressing a range of “different cancers and different tumor types,” Lamb said.
Canadian biotech boom
Fusion’s Series B is among the largest of a recent series of financings that have fuelled record VC deployments in Canada’s life sciences sector.
VC invested reached $1.1 billion in both 2016 and 2017, thanks chiefly to rounds backing such companies as Aurinia Pharmaceuticals, BlueRock Therapeutics, DalCor Pharmaceuticals, Milestone Pharmaceuticals, Repare Therapeutics and Zymeworks.
The following year, investing fell back to $523 million, according to Refinitiv data, mostly because large rounds were fewer in number.
The statistics point to a sector that has “genuinely come of age,” Lamb said, due to several factors, including the quality of deal flow generated by more experienced entrepreneurs.
Another factor is Canada’s increasing profile on the global stage, which has spurred inflows of capital typically earmarked for biotech hubs in Boston and San Francisco, he said.
Lamb says these trends have mostly benefitted a handful of Canadian life sciences companies, putting them on a more equal footing with their U.S. competitors.
However, many other local opportunities remain underfunded, he said.
Genesys, a Toronto venture capital firm that invests in North American biotech and healthcare companies, was founded in 2000 by Lamb and Managing Director Kelly Holman.
Before Genesys, Holman and Lamb were investment pros at MDS Capital Corp. The firm’s third managing director, Jamie Stiff, joined in 2002.
Genesys is investing from its third fund, Genesys Ventures III, which raised $90 million in 2016.