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VC firm Flagship Pioneering raises $1.1b for biotech startups, despite reeling economy

The Cambridge firm’s CEO says the coronavirus crisis means such investments are more critical than ever

Noubar Afeyan of Flagship Ventures at Moderna Therapeutics in Cambridge.Lane Turner/Globe Staff

The coronavirus pandemic is disrupting clinical trials of experimental medicines, but it hasn’t prevented one of the state’s leading venture capital firms from raising more than $1 billion to create more biotech startups.

Flagship Pioneering, among the biggest creators of life-sciences companies in Massachusetts, said it started raising money for its seventh “origination fund” in mid-January and closed it last month, after it totaled $1.1 billion.

The Cambridge venture capital firm has created 41 companies since it was founded in 2000, all but one of them in Massachusetts. They include Cambridge-based Moderna, which helped develop the first potential COVID-19 vaccine to enter clinical trials. Researchers started injecting that substance into the arms of healthy volunteers on March 16 at the Kaiser Permanente Washington Health Research Institute in Seattle.


Noubar Afeyan, the founder and chief executive of Flagship, acknowledged the epidemic is delaying or derailing clinical drug trials, including some planned by Moderna. But the health crisis, he said, also highlights how crucial it is to discover and create new drugs and vaccines.

“The only time I remember people in the White House talking about anything having to do with biotechnology was when the human genome was sequenced, and that was because it was a milestone,” he said, referring to President Clinton’s landmark announcement 20 years ago.

“Now we’re talking about the impact” of biotechnology on the health of millions of people all over the world, he added.

Flagship intends to use the $1.1 billion to create companies that reflect several priorities, including scientific discovery through artificial intelligence and the development of medicines to address health problems before they escalate.

"The current COVID-19 crisis deeply underscores the essential need for a comprehensive health security initiative to complement our current health care system,” Afeyan said.

The latest fund-raising haul comes after Flagship raised $1.08 billion last year and early this year. The firm plans to use that money for companies that Flagship has launched but that need more venture capital and private investments before they can sell stock in an initial public offering.


Since its founding, Flagship has raised $4.4 billion, of which more than $1.9 billion has been deployed to start and grow companies.

The fund-raising announcement was a glimmer of good news for an industry that has been buffeted by the epidemic. Many drug makers have postponed or canceled drug trials, in part because they didn’t want to expose patients to the new coronavirus.

On March 23, Eli Lilly and Co., of Indianapolis, said it will delay most new studies and pause enrollment in most ongoing ones.

Four days later, Boston-based Vertex Pharmaceuticals took a similar step. Vertex, which makes drugs for cystic fibrosis, a rare life-threatening genetic condition, said it wanted to free up hospitals to deal with the surge in COVID-19 cases.

On Sunday, Moderna said it was pausing enrollment in several clinical drug and vaccine trials, citing “special concerns for the safety and health of pediatric patients and their caregivers.” At least two of the experimental drugs in the trials targeted rare diseases.


Jonathan Saltzman can be reached at jonathan.saltzman@globe.com.