Biotech will still exist after the pandemic. These VCs have $2.5 billion to make sure

The coronavirus pandemic has forced biotech companies to indefinitely pause clinical trials, delay scientific presentations, and shut down research labs. But, in a sign that the world’s moneyed elite believe biotech will pull through, two of the industry’s largest venture capital firms just raised about $2.5 billion to place bets on the future.

Arch Venture Partners, which counts Illumina and Alnylam among its past successes, put together two funds totaling $1.46 billion that will go into early-stage biotech companies. Flagship Pioneering, which helped launch Moderna Therapeutics and Editas Medicine, raised $1.1 billion to build new companies from scratch.

Arch doesn’t always disclose the results of its fundraising, but this time, with public markets foundering, making noise made sense, said Robert Nelsen, a managing director of ARCH and its co-founder.

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When is Biogen going to file its Alzheimer’s drug for approval?

Does Gilead Sciences’ antiviral help against the novel coronavirus? And does Genfit’s liver drug even work?

Those are just a few of the questions to which we expect answers in the three months ahead. STAT’s Adam Feuerstein has rounded up all the big biotech milestones slated for the second quarter, which include Biogen’s long-promised FDA filing for aducanumab, Gilead’s data on the closely watched remdesivir, and Genfit’s third chance to actually explain whether its drug can treat NASH.

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How gene therapy could change neuroscience

Scores of would-be neurological drugs are meant to treat symptoms by triggering key receptors in the brain. Quite often they hit their targets, but the resulting effect is too weak to make for a functional medicine.

Two startups on opposite sides of the U.S. think they’ve found a better way. Rather than researching new targeted therapies, Redpin Therapeutics and CODA Biotherapeutics are trying to tune the brain’s receptors to make existing ones more effective.

As STAT’s Kate Sheridan reports, the approach is called chemogenetics, and it involves using gene therapy to encode for bespoke receptors that will respond to a specific trigger drug. It’s all preclinical for now, but each company envisions a future in which the technique could treat Parkinson’s disease, neuropathic pain, and seizure.

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The big trend in biotech stocks is not owning biotech stocks

At least according to Cowen’s quarterly biotech thermometer, whose latest survey of investors found that the “stock most loved” was not a stock at all, but rather “cash.”

Investors can be forgiven for moving to the sidelines after one of the most tumultuous quarters in market history. The major biotech indices outperformed the S&P 500, sure, but that makes little difference when all the relevant numbers are red.

According to Cowen, conversations with investors haven’t really covered biotech stocks at all, rather focusing on “personal health and well-being, as well as the unprecedented disruptions to personal lives.” Biotech fund managers “hunkered down at home and simply tried to stay safe. Few were actively deploying capital.”

But with the punishing month of March now finally over, at least a few investors are looking for opportunity among the wreckage in the biotech market. The question now is whether the sector has hit its bottom, or if the second quarter will bring more of the same.