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Third Rock raises $770m in new funding round

Agios Pharmaceuticals board chairman David Schenkein in 2018, when he was still CEO. The successful Cambridge biotech was funded by Third Rock Ventures.
Agios Pharmaceuticals board chairman David Schenkein in 2018, when he was still CEO. The successful Cambridge biotech was funded by Third Rock Ventures. (Craig F. Walker/The Boston Globe)

Creating life-sciences companies may be risky, but investors’ appetites show no sign of waning.

Third Rock Ventures, the Boston venture capital firm, said Thursday that it has raised $770 million from investors for its fifth and latest fund. It has collected a total of $2.7 billion for life-sciences businesses since its inception in 2007.

“The risk in our industry has always been there,” said Abbie Celniker, a partner at Third Rock. “Despite that risk, we can refer to so many examples of drugs that not only make a lot of money for a lot people but, more importantly, truly change the lives of patients.”

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Over the past 12 years, Third Rock has created or invested in 53 life-science companies, it says — 43 in Massachusetts and 10 on the West Coast. They have marketed 10 products in the United States and overseas, including five medicines, three diagnostic tools, and two devices.

Included are two drugs developed by Agios Pharmaceuticals to treat acute myeloid leukemia and three cancer diagnostic tests marketed by Foundation Medicine. Both companies are in Cambridge.

The Swiss drug giant Roche was so impressed with Foundation’s work that it bought the company last June for $2.4 billion. Roche already owned more than half of the shares in Foundation and had made a big bet on personalized cancer care.

On Monday, another Cambridge company created by Third Rock, bluebird bio, got European Union regulators to approve its first gene therapy, for the inherited blood disorder beta thalassemia. The company hopes the Food and Drug Administration will approve the same treatment in the United States.

Celniker said the latest fund will finance efforts to develop gene therapy treatments — and not just for rare diseases. Another Third Rock company, Voyager Therapeutics, is working on a gene therapy for Parkinson’s disease, a neurological disorder.

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She also expected the fund to bankroll efforts to find a treatment for Alzheimer’s disease, which is the Holy Grail for many drug makers because it is so common.

Of course, most experimental drugs never make it to market. Even if they enter clinical trials, some 86 percent fail to win FDA approval, according to a study last year by MIT researchers.

Nonetheless, investors continue to gamble on life-sciences startups in Massachusetts, which boasts one of the world’s leading drug-making clusters.

In March, Flagship Pioneering, another major venture capital firm, announced it had raised $824 million. That was the Cambridge company’s largest-ever single fund-raising effort.

Since Flagship was founded in 2000, it has raised a total of $3.3 billion in eight funds to spawn and finance biotech, medical technology, and bio-agriculture businesses. Flagship has created more than 75 life-sciences businesses.

Another venture capital firm, Cambridge-based Atlas Venture, says it has invested more than $2 billion since 1990, including $880 million raised since 2015.


Jonathan Saltzman can be reached at jsaltzman@globe.com.