ATP Blazes US Venture Capital Trail into European Biotech Startups

The US venture capital firm Apple Tree Partners (ATP) is making its first transatlantic foray by launching the UK immuno-oncology company Adrendra Therapeutics. This happens as US investors increasingly search for value-for-money opportunities in early-stage European biotech startups.

Last week, the life science-focused investor ATP contributed €47M (£40M) to the Series A launch of immunotherapy start-up Adendra Therapeutics, a spin-out of London’s Francis Crick Institute. 

Adendra is exploring how to treat cancer and autoimmune diseases with drugs targeting a type of immune cells called dendritic cells. Dendritic cells sound the alert when cells die violently, for example through infection or tumor growth. However, they can be overactive in autoimmune disorders where the immune system attacks healthy tissue.

Adendra aims to take dendritic cell biology in an entirely new direction, said CEO Raj Mehta, who is also ATP’s Entrepreneur in Residence. The approach consists of stimulating these cells’ natural responses to fight against tumor growth or suppressing them to address autoimmune diseases.

“Whereas some previous efforts at exploiting dendritic cell biology relied on cell therapy, Adendra will be generating molecular agents such as monoclonal antibodies as therapeutics,” he explained.

US investors have historically contributed big cash to European biotech companies, but this has typically been in firms at a late stage. ATP’s investment into Adendra is a sign that US investors are now seeking out European companies earlier on, not simply as anchor investors for crossover funds, but also to seed and grow them in collaboration with European academic institutions.

“Adendra may be our first publicly announced UK-based company, but watch this space,” said Mehta. “We are enthusiastic about the quantity and quality of scientific activity in the UK ‘Golden Triangle’ – we see that it has really reached critical mass.”

Research suggests that the UK life science sector is worth more than €85B annually, driven by the three ‘golden triangle’ cities of Cambridge, Oxford, and London. The golden triangle’s life sciences ecosystem is expected to grow further considerably by 2050, adding close to a million jobs to the UK economy. Additionally, life sciences VCs across Europe have seen a record-breaking year in fundraising as the pandemic hammers home the importance of funding biotech companies.

“As technology accelerates connectivity, in science and in business, biomedical innovation is increasingly a global endeavor,” said Mehta. “It only makes sense that smart investors will follow the best science, wherever it is happening.”

Mehta has previously acted as interim CEO at other immunotherapy companies including GammaDelta Therapeutics, Revitope Oncology, and BliNK Therapeutics.

ATP has committed €2.3B in its portfolio, which includes companies such as Canadian kidney disease biopharmaceutical Chinook Therapeutics and non-viral gene therapy biotech Intergalactic Therapeutics. ATP has also invested in the US cardio-renal company Corvidia Therapeutics, which was set up in 2015 by the Paris-based life sciences VC firm Sofinnova Partners. Corvidia was acquired by Novo Nordisk in 2020 in a deal worth up to €1.9B ($2.1B).

“US investors are increasingly investing in Europe, across the value chain from early stage to later stage,” said Antoine Papiernik, Chairman and Managing Partner at Sofinnova Partners. “Valuations have also increased, which is a function of supply and demand: more capital chasing a finite number of deals.”

“Europe, which was historically underfunded, has demonstrated the outstanding quality of its science and remains very good value for US investors.” 

As a manager of a European VC firm, Papiernik sees this development as very positive. It will allow European and US investors to work together to transform innovations into global plays.

“Europe is more complex than the US because of its heterogeneous markets,” he elaborated. “So, US investors will need to continue collaborating for a while with those who know the local environments and understand how to invest across this vast and culturally diverse territory.”