Venture capital investing has already reached a 10-year high in 2018, according to a report last week. However, while investment trends in life sciences have been similar to those in technology generally, a venture capital investor specializing in life sciences said there are some significant underlying differences too.

The report, released Oct. 29 by PitchBook, found there was $27.9 billion in venture capital investing in the third quarter of 2018, meaning the total for this year has already reached a record $84 billion, with still one more quarter to go. One reason, the report found, was that rounds exceeding $50 million are becoming increasingly prevalent.

There are some similar trends in the life sciences market versus technology overall, but there are some differences in underlying drivers, said Menlo Park Ventures life sciences investor Greg Yap, in an email. “Round sizes have continued to grow, especially at early stages, driven mostly by large therapeutics investments,” he wrote.

In particular, $50 million Series A rounds are now not uncommon, but some of those are because of venture capital firms seeding and incubating companies internally before their public launches, Yap wrote, pointing to firms like Third Rock Ventures and Atlas Venture. In May, Third Rock launched Cambridge, Massachusetts-based Casma Therapeutics with $58.5 million in Series A funding, to develop drugs for lysosomal storage disorders, liver and muscle diseases, inflammation and neurodegeneration. Atlas launched Generation Bio in January, having founded the company with a $25 million Series A round in 2016. And on Oct. 25, OrbiMed launched 89Bio with a $60 million Series A round. The company will develop Israel-based Teva Pharmaceutical Industries’ nonalcoholic steatohepatitis drug pipeline.

According to the report, deals in life sciences worth $50 million or more have significantly increased since 2008, and even since last year, with more than 10 percent now rising to that level, even as the percentage of deals worth $25-$50 million has remained relatively constant.

This year has also seen one of the largest Series A rounds, followed by an initial public offering. South San Francisco, California-based Allogene launched earlier this year with a $300 million Series A, only months before going public in October, having filed in September for a $100 million IPO. The company, founded by Kite Pharma founders David Chang and Arie Belldegrun, is developing allogeneic CAR-T therapies. Indeed, the IPO market in life sciences has been healthy, Yap wrote, which has allowed companies to go public earlier, sometimes even prior to any human clinical data.

In addition, he said, market dynamics are changing as corporate investors from the drug industry continue to increase activity, while many new Chinese and other Asian investors expand investing in life sciences. Last month, Taiho Ventures – the venture capital arm of Japanese drugmaker Taiho Pharmaceutical – increased its investment pool sixfold, from $50 million to $300 million, while in June Pfizer said it would increase its venture capital arm’s pool by $600 million, including $150 million for neuroscience. Meanwhile, Chinese firms have also been participating in a number of funding rounds, including Terns Pharmaceuticals, which late last month closed an $80 million Series B round that included participation from Shanghai-based Decheng Capital. In May, next-generation sequencing firm Grail closed a $300 million Series C funding round led by several Chinese venture capital firms.

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