In March of 2011, ARTIS and our affiliates led the first institutional round of financing at Stemcentrx with a $17M investment in a total round of $20M. Stemcentrx represented everything we look for within our portfolio companies: a talented, passionate team addressing a hard problem we care deeply about with a differentiated approach showing promising early results. This morning, AbbVie announced its acquisition of Stemcentrx for as much as $10.2 billion. This outcome represents the largest private transaction in the history of venture-backed biotech and the second largest takeout of any private company in the history of venture. More importantly, it represents a spectacular milestone for Scott, Dan, and Brian and all those willing to play the long game, tackling humanity’s hardest problems with deep science.
You may be reading this in an attempt to understand how the largest venture-backed biotech acquisition in history could have happened with a company you’ve likely heard precious little about. Digging a bit deeper, you’ll find this has been by design all along.
From their earliest stages, the team has stayed heads-down, focused with a singular purpose: embracing the cancer stem cell (CSC) paradigm to discover novel therapies with the ultimate goal of curing patients with solid tumors. All the while, and often in stark contrast to other startups seeking adoration before producing anything of value, the Stemcentrx team has been willing to let their results define them rather than their words. See our Blog post from September of last year for more details: “Stemcentrx Charges Out of Stealth: Science Does All the Talking.”
Cancer research is often used as the yardstick by which difficult problems are measured, consuming over $500 billion in research dollars since Nixon first declared “War on Cancer” in 1971. We couldn’t be prouder to have had the opportunity to partner in the journey with Stemcentrx since 2011 as their first institutional investor, and it has been a privilege for me to serve on the board of directors.
In the last decade, it’s been all too frequent for investors to shun “hard science/tech” and not back startups believed to have high “technical risk” with long gestation periods. When we made the decision to partner with Stemcentrx, other tech-focused venture funds went so far as to announce publicly they would invest in anything but life science. Only now are many of these same funds reversing course. This trend is only set to accelerate as we are in the midst of a technological renaissance within the area of health and wellness driven by multiple tailwinds: affordably mapping the human genome and the DNA of all living systems, growing adoption of targeted therapeutics and immunotherapies, digitization of healthcare and movement towards more transparent & health-conscious diets.
Today’s outcome is a wake up call to those that continue to ignore these tailwinds and instead choose to fund yet another consumer app with the hope they will once again generate an instant buzz and rapidly skyrocket to millions of users. We cannot complain as an industry about the lack of value creation, enduring companies, and liquidity events if we aren’t willing to solve big problems. At ARTIS, we’ve built a history of enthusiastically backing teams across multiple industries addressing these sorts of challenges; whether it’s YouTube revolutionizing digital media, Stemcentrx’s novel cancer therapeutics, or emerging companies with the promise to either upend or create entirely new industries like Juicero, Modern Meadow, Cohesity, Omicia, and others.
The conventional wisdom that has infected Silicon Valley is that “real innovation” is over, tech is “out of new ideas,” and the entire industry is overvalued and ripe for a massive correction. We’re content to leave the armchair quarterbacking to others while we continue to partner with entrepreneurs working on life-changing breakthroughs that will materially improve the world around them.
If you’re one of these teams not afraid to tackle hard problems with technical risk that have enormous potential to both move the world forward and be a smashing commercial success, please contact us.