Life science VCs are posting strong across-the-board returns, allowing some firms to raise new funds larger than their prior vehicles. Still, the contraction that began nearly five years ago is still thwarting other firms’ efforts to press on through hard times.

Two high-profile VCs, CMEA Capital and Atlas Venture, are trying their hands at asset financing, an investment strategy that prioritizes single drug programs over companies and is becoming, at least theoretically, possible to do in a more systematic way. That's because big drug companies have cut internal R&D staff, often in drastic measure, and they want someone to share the development risk of drugs now sitting idle on their shelves.

Someone seeking a clinical space that offers a great deal of activity and anticipation, and where the major developments and dealmaking remain around the corner, would have to look no further than the PI3 kinase area. Early bets placed on PI3K pan-selective inhibitors may pay off, but smart money lately has been focused on isoform-selective inhibition of this signaling pathway implicated in cancer, inflammation, and autoimmune disease. In this issue, we profile three emerging companies hoping to succeed in developing PI3K inhibitors for diverse clinical applications: Arno Therapeutics, Intellikine, and Paloma Pharmaceuticals.