StrictlyVC: January 6, 2017

Friday! Thank God. Hope you have a wonderful weekend, everyone.:)

Top News in the A.M.

Apple revealed in a regulatory filing earlier that it missed its revenue and profit goals in 2016; it’s the first time that has happened since Tim Cook took over as CEO.

The FTC just sued the Taiwanese networking equipment company D-Link over its routers and internet cameras, saying their flaws have potentially compromised sensitive consumer information.

The Billion Dollar Pharma Startup That Silicon Valley Totally Missed

When it comes to millennials and health care companies, recent history gives plenty of reason for pause. Elizabeth Holmes, the founder and CEO of Theranos, has watched her star fall precipitously over the last year, amid a continuing drumbeat of allegations that her blood testing company never worked as advertised. Meanwhile, Martin Shkreli, a young hedge fund manager turned pharmaceutical executive, was for a while the country’s most reviled businessperson, after his relatively small company, Turing Pharmaceuticals, bought a drug that treats toxoplasmosis, and promptly raised its price from less than $20 per tablet to $750.

If these black marks on the industry are slowing down 31-year-old Vivek Ramaswamy in any way, you wouldn’t know it. He thinks his company, Roivant, will one day be a giant holding company for dozens of independent biopharmaceutical companies – both by developing drugs as well as focusing squarely on reducing the time and cost of the drug development process.

It all sounds rather lofty. Then again, it’s hard to argue why Ramaswamy shouldn’t be the one to reshape how drugs are brought to market.

A Cincinnati native who studied biology at Harvard then earned a law degree from Yale, it was when Ramaswamy began working as an analyst in 2007 at the hedge fund QVT Financial in New York that he first observed the problem that defines his work today. What he noticed: that many big and small pharmaceutical firms abandon promising drugs for various reasons having nothing to do with their efficacy. Sometimes, it’s a strategic decision to focus elsewhere; sometimes, it owes to a lack of resources. Seeing an opportunity to complete the development of some of these abandoned late-stage drug candidates and get them to market quickly, Ramaswamy struck out on his own in 2014.

Having earned the trust of QVT was key. The firm, along with Dexcel Pharma, an Israeli firm that reviewed Ramaswamy’s work at QVT, provided Ramaswamy’s new holding company with just less than $100 million in capital – a feat, given that he was just 28 years old at the time.

Yet what Ramaswamy has done with Roivant in the years since is pretty remarkable, too.

While Silicon Valley has obsessed over Theranos, Ramaswamy has acquired a dozen drugs, including an Alzheimer’s pill that’s named, for now, RVT-101. He also formed a company around that drug, Axovant Science, and took it public in 2015 – despite that the drug’s Phase 3 results won’t be out until this year.

It became the biggest biotech IPO ever in the U.S., raising $360 million. It has largely held up, too. Axovant’s shares, which opened at $15, currently trade around $13.25.

Roivant has also launched Enzyvant Sciences, a company focused on rare genetic pediatric conditions that Ramaswamy calls “ignored and underserved, ” including a metabolic disorder called Farber disease and DiGeorge syndrome, a genetic disease that results in poor development of several body systems.

Roivant has also teamed up with one of Japan’s oldest companies, Takeda Pharmaceuticals to start Myovant Sciences, a standalone company that’s focused on women’s health issues. The drug candidate around which the company is centered is called Relugolix, which aims to treat endometriosis and uterine fibroids. Takeda is currently conducting two Phase 3 studies in women with uterine fibroids in Japan.

More here.

New Fundings

AOBiome, a 3.5-year-old, Cambridge, Ma.-based company developing skin products that restore the body’s ammonia-oxidizing bacteria, has raised $30 million in funding from iCarbonX. More here.

Bardy Diagnostics, a three-year-old, Charlotte, N.C.-based company that makes cardiac arrhythmia monitoring devices, has raised an undisclosed but “significant” amount in funding from SV Life Sciences Advisers, Health Enterprise Partners, Ascension Ventures, and Square 1 Bank. Mass Device has more here.

BlackThorn Therapeutics, a 3.5-year-old, San Francisco-based clinical stage biopharmaceutical company that’s developing targeted treatments for neurobehavioral disorders, has raised an additional $14 million in Series A funding from GV and Biomatics Capital. The new capital brings the company’s Series A round to $54 million. More here.

Bitglass, a 3.5-year-old, Campbell, Ca.-based cloud security access broker, has raised $45 million in funding led by the Australian sovereign wealth fund Future Fund, with participation from New Enterprise Associates, Norwest Venture Partners, Innov8, and others. Fortune has more here.

CloudCraze, a seven-year-old, Chicago, Il.-based enterprise commerce platform built natively on Salesforce, has raised $20 million in Series A funding led by Insight Venture Partners, with participation from Salesforce Ventures. Built in Chicago has more here.

Grail, a year-old, San Francisco-based early cancer screening company that was spun out of the DNA-sequencing giant Illumina, is reportedly looking to raise $1.7 billion in a fresh round of funding. The company had raised $100 million in a Series A round in January of last year. Fast Company has (a little) more here.

Mediafly, a 10-year-old, Chicago-based maker of software for salespeople, has raised $10 million in funding from Boathouse Capital. Crain’s Chicago Business has more here.

Payfone, an eight-year-old, New York-based company that makes mobile identity authentication software for digital channels, has raised $23.5 million in Series E funding co-led by BlueCross BlueShield Venture Partners and former Chicago executive turned investor Andrew Prozes. Other participants include Strauss Zelnick, Maclab Development Group,Transaction Network Services, RRE Ventures, Opus Capital, Relay Ventures, Early Warning Services, American Express Ventures, Verizon Ventures, and Rogers Venture Partners. More here.

Weedingtech, a five-year-old, London-based company that makes an herbicide-free weed killer, has raised £3 million ($3.7 million) in funding from Calculus Capital. Angel News has more here.

New Funds

Abu Dhabi’s Mubadala Development Co. is now reportedly considering committing $10 billion to $15 billion to partner with SoftBank Group and Saudi Arabia’s Public Investment Fund in that $100 billion new vehicle to invest in global technology, according to Bloomberg. The fund, which is also receiving capital from Apple and Qualcomm, aims to close this month. More here.

IPOs

Not so tech related but maybe worth mentioning: Neiman Marcus Group, the luxury department retailer, withdrew its plans for an IPO earlier today. It originally filed in August 2015 with an estimated deal size of $1 billion. More here.

Volvo Cars just raised 5 billion Swedish crowns ($532 million) from a group of Swedish institutional investors, taking it a step towards what many believe will be an IPO seven years after being bought by Chinese carmaker Zhejiang Geely Holdings. More here.

Exits

Bitcasa, a five-year-old, San Mateo, Ca.-based company that specialized in helping customers securely store their data on a variety of cloud services, has shut down and not been acquired by Intel, despite some reports to the contrary. Bitcasa had raised roughly $21 million in funding from Horizons Ventures, and Pelion Venture Partners, among others. TechCrunch has more here.
Castlight Health, a company known for making price transparency in healthcare easier to manage for self-insured employers, has acquired Jiff, a health IT company that developed an employee benefits marketplace with the idea of making these benefits easier to manage. As part of the deal, Castlight will give 27 million shares and options to former Jiff equity holders when the deal closes in the first half of this year. MedCity News has more here.

People

Campbell Brown, the former NBC News correspondent and CNN prime-time host, has joined Facebook to lead its news partnerships team, starting immediately.

Elon Musk was back at Trump Tower today and reportedly meeting with Steve Bannon, the incoming chief strategist at the White House.

Theranos just slashed another 41 percent of its workforce.

Jobs

TechCrunch‘s longtime Battlefield Editor, Sam O’Keefe, was just recruited into Google to work under cloud chief Diane Greene (sniffle). The silver lining: TC is looking for a sharp replacement — someone who can recruit top-notch startups, choose others from a huge pool of applicants, and whip them into shape for their stage appearances. The job is in San Francisco.

Essential Reads

Great look by Recode into the weekly meetings Mark Zuckerberg continues to hold with Facebook‘s now 16,000 employees  catch-ups where secrets are shared yet astonishingly little is leaked.

Detours

The “James Bond of philanthropy” gives away the last of his fortune.

The 30 Most Disappointing Under 30.

Retail Therapy

Nothing like receiving a potato that reads, “Stacey, I still love you.”


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