Immunotherapy Redefines How We Treat Cancer



With advances in immunotherapy, oncology treatment is undergoing a paradigm shift that is dramatically changing the investment and innovation patterns around cancer-fighting drugs. 

Silicon Valley Bank’s Life Science and Healthcare Practice published a new report, Oncology Revolution: The Rise of Immunotherapy, that describes how quickly the landscape is shifting and what biopharma companies and investors are doing to position themselves for growth.

Immunotherapy has been studied for decades, but only recently have we begun to see tremendous clinical benefits for patients. In 2016, immunotherapy treatments captured one-third of all spending on oncology drugs, despite accounting for just 9 percent of FDA-approved oncology drugs.  

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Companies target high-mortality cancers

Each year, more than 600,000 people in the U.S. die of cancer. Fortunately, we’re seeing new innovations in the sector that are providing meaningful clinical outcomes. For example, while breast cancer accounts for 15 percent of annual incidence and 7 percent of deaths, mortality rates have gone down by nearly 23 percent since 2000. Lung cancer, however, accounts for 13 percent of annual incidence and one in four deaths. Not surprisingly, oncology immunotherapies in development have an increased focus on lung cancer. Keytruda (Merck) and Opdivo (Bristol-Myers Squibb), the two seminal immune oncology therapies, were approved for lung cancer in 2015.  

Companies are developing unique approaches to combat this prolific disease and progress is being made. Increased use of immunotherapy and non-immunotherapy treatments in combination is leading to more treatment options for patients. Drugs like Amgen’s Imlygic in combination with BMS’ Yervoy in advanced melanoma have shown double the response rate compared to Yervoy alone.  Still, as the chart indicates, some cancers are much harder to treat than others and much work is needed to reduce mortality rates. 


Immunotherapy dominates oncology Series A and M&A

The successes to date are driving new immunotherapy company formation, highlighted by the amount of Series A investments. Since the beginning of 2016, immunotherapy startups have garnered $1.3B in Series A commitments, accounting for nearly 75 percent of all oncology Series A investments.  

Immunotherapy is now a required component of any leading biopharma company’s oncology portfolio, and the acquisition appetite has grown quickly. M&A deals have risen from 31 percent of total oncology deals in 2014 to 70 percent in the first half of 2017.  Gilead’s $12B acquisition of Kite Pharmaceuticals, announced in August, only underscores the optimism around immunotherapy innovations. 

Immunotherapy is poised for growth

From an investor’s point of view, immunotherapy companies have been good bets: They are exiting earlier in drug development, while requiring less invested capital and generating a higher return on invested capital than other oncology companies. 

A large and diverse number of late-stage therapies in development indicates future growth, but competition and Phase III failures make it anyone’s game. There are rumblings that the space is overcrowded and ripe for consolidation, but with the large need for effective cancer treatments, we think opportunities are abound. 

For patients, companies and investors, immunotherapy represents new opportunities and an encouraging new frontier for combating cancer.  

Sources: SVB Proprietary Data, BiomedTracker,, Pitchbook



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About the Author

Andrew Olson, PhD is a life sciences manager at SVB in San Francisco, where he performs valuations and strategic advisory services with a focus on biotech mergers and acquisitions. Combining his extensive training as a chemist with his passion for the commercial side of innovation, Andrew is a valuable partner to both early-stage and larger biotech companies. Early-stage innovators trust Andrew to steer them through the 409A valuation process. He then uses the resulting insights to advise larger biotech firms looking to make their first strategic acquisition. Throughout his work at SVB, Andrew especially thrives on witnessing relevant advances in disease treatment.

Before joining SVB, Andrew was a management consultant at ZS Associates, where he focused on forecasting, pipeline strategy and market research for large pharmaceutical and biotech companies. He holds a bachelor’s degree in chemistry from Carleton College in Northfield, Minnesota, and a doctorate in chemistry from the University of California, Berkeley.

While Andrew keeps pace with rapid advances in his industry, he enjoys moving at a steady clip in his personal life, too. This former competitive road cyclist and national Frisbee competitor is currently transitioning into distance running. He is also an avid cook who loves continental European food.