Who’s funding the biotech industry in Europe? I’ve gathered a list of some of the most active European biotech venture capital firms that will be setting the pace of the industry this year.
Biotech can do great things, from curing deadly diseases to helping make the plastics industry more sustainable. But there is a common challenge to all biotech companies trying to make the world a bit of a better place: money. They need it to develop the science, run clinical trials, manufacture its products and pay the salaries of their motivated workers. And given the long time it takes to fully develop and commercialize a biotech product, these companies need millionaire funding.
That’s what venture capital firms are for. They give you a few millions, and, if your company is successful, they will get a few more in return. Sounds easy? Investing right can be as difficult as convincing investors that your company is worth funding. So I’ve put together a list of the 10 biotech venture capital firms in Europe that have been most active in the past year and are likely to protagonize some of the biggest deals in European biotech in 2018. The list is ordered according to the VCs recent investment activity and the size of their most recent closing of a biotech fund. Enjoy!
Paris-based Edmond de Rothschild (EdRip) tops our list this year with the closing of a €345M fund on February. The new fund, called BioDiscovery 5, is set to invest in preclinical and early clinical stage companies over a four to five-year period, with 70% committed to European companies. About two thirds will be destined to biotech and the rest to medtech companies.
“We have invested in all economic crises or stock market downturns in the last 15 years and always managed to distribute money to our LPs,” EdRip partner Raphaël Wisniewski recently told EP Vantage.
EdRip’s new fund has already made three investments, including Berlin-based Complexa, working in the field of inflammatory disease; and Erytech, a Parisian biotech using red blood cells to treat cancer.
Based in Amsterdam, Life Sciences Partners (LSP) is boosting its investment on medical technology with a new fund launched in December. Called LSP Health Economics Fund 2, it is set to invest €280M — part of it coming from the European Investment Fund — in companies working in medical devices, diagnostics and digital health.
LSP’s fund will invest in around 15 companies across Europe and the US whose products are close to the market, which the VC expects to turn into good returns. “Success stories like Neuravi and Rotation Medical from the first LSP Health Economics Fund are great examples,” stated Managing Partner Rudy Dekeyser after the launch.
From London, Medicxi launched a $300M (about €240M) fund in June that counts with money from Google’s Verily, Novartis, and the European Investment Fund. Medicxi Growth 1 will invest in European life sciences companies with compounds in Phase II or beyond with potential to be licensed.
Medicxi has a characteristic focus on investing in asset-centric, and often virtual biotech companies. “Personally, I’d say it’s more of a drug development company with an extensive development pipeline of candidate molecules,” Trevor Baglin, partner and co-founder of the successful virtual biotech XO1, told me in an interview.
In addition to the new fund, Medicxi has just created an “ideas factory” in collaboration with Johnson & Johnson called C21 Med that aims to take compounds in the early research stage and create startups to develop them into successful drugs.
Located in Naarden, quite close to Amsterdam, Forbion Capital Partners closed a €183M fund in April of 2016 with the participation of the European Investment Fund and the Dutch Venture Initiative. Forbion Capital Fund III will invest about 70% of the money in European companies and the rest in the US and Canada.
The fund focuses on companies developing drugs, medical devices and diagnostics. Among some of the investments Forbion has made is Prexton Therapeutics, which has just been acquired by Lundbeck in a deal that could be worth near €1Bn. Perhaps that will motivate the VC to push its investments or even start preparing a new fund soon.
Abingworth Management, based in London, announced the first closing of its latest biotech fund in August. So far the Abingworth Bioventures VII LP fund counts with a sum of $220M (approximately €180M) to be invested in healthcare and life sciences companies across Europe and the US.
Ysios Capital raised €126M in October of 2016 for its second biotech fund, called Ysios BioFund II. The VC has had a great start in 2018 with three major acquisitions of companies in its portfolio: TiGenix for €520M, SAT-Dx for €153M and most recently Prexton Therapeutics for almost €1Bn.
Ysios is based in Barcelona, and up and coming European biotech hub according to managing partner Joël Jean-Mairet. “The ingredients are here, we have a strong pharma industry, we have top business schools, we have entrepreneurship, we have top hospitals… One of the missing pieces is the lack of capital,” he told me in an interview.
Sofinnova Partners is based in Paris, and unlike most other major biotech VCs, it has areas of focus beyond medicine. The company just closed the fund Industrial Biotech I at €125M making it the largest fund in the world dedicated to green biotech. About 60-70% of the money will go to companies in Europe and the rest towards Canada and the US.
The fund focuses on companies working on incorporating biology in the chemical industry to either help make new compounds or shift the production of materials such as plastics into a sustainable process. “We’re leading and pioneering the field,” Managing Partner Denis Lucquin told me after the first closing.
One of the companies in Sofinnova’s portfolio is Avantium, which is developing 100% renewable plastic bottles for Coca-Cola and Danone.
Sofinnova still invests in the medical field though, with a $650M venture called Fund X launched in October of 2016.
This January, Paris-based Truffle Capital raised $102M (about €83M) in the first closing of its new Truffle BioMedTech fund, which has a target of reaching $240M later in 2018.
Truffle’s strategy to investing consists in founding or co-founding French biotech startups itself from scientific discoveries made in top universities across Europe and North America, with 20 biotech and medtech companies having been created through this model. “Truffle’s entrepreneur-investor business model works well, as demonstrated by the recent successes of Vexim, Carmat, Symetis, Pharnext, Carbios and Abivax, all founded or co-founded by Truffle Capital,” stated CEO Philippe Pouletty after the first closing.
From its headquarters in Basel, BioMedPartners recently boosted its investment in the biotech sector with the closing of a CHF 100M (€86M) fund called BioMedInvest III with the participation of the European Investment Fund.
The biotech VC plans to invest the funds into up to 15 companies in early- or mid-stage, with three of them already selected: Cardior Pharmaceuticals, Amal Therapeutics, and Allecra.
BioMedPartners’ strategy is to invest in companies located within the Alpine ring — Switzerland, Germany, France, Italy, and Austria— which has seemed to work quite well for the VC so far.
Last but not least on our list is Seventure, a Paris-based biotech VC with a very unique fund. Health for Life Capital is the first venture fund to be solely focused on investing in the microbiome space. Closed in 2015 with €160M, the fund focuses mostly on European companies, such as Enterome or TargEDys.
Seeing how the interest in the microbiome has been skyrocketing in the last few years, it seems likely that Seventure will want to go for a second round soon. But meanwhile, the French firm has launched a smaller €24M fund going after animal health applications.
With all these big funds actively looking for promising companies to invest in, it seems like 2018 might be quite a good year for biotech. What do you think?
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