Print
Email
Print Edition Stories
MHT's Rodney Brown: App developers see opportunity in new iPhone
MHT's Marc Songini: Technology to keep seniors healthy
MHT's Marc Songini: Mass. bio firms prep for lifting of stem cell ban
The largest venture capital financing round awarded to a New England company in the second quarter was the $40 million netted by Aileron Therapeutics Inc. The round featured investments from the venture capital arms of four major pharmaceutical companies: GlaxoSmithKline’s SR1, Novartis Venture Fund, Eli Lilly and Co.’s Lilly Ventures and Roche Venture Fund.
The case illustrates the increasingly prominent role big pharmaceutical companies are taking during the recession — both to help get new biotech firms off the ground and to prop up those companies with promising technologies, but few financing options.
The benefits of this relationship to big pharma are clear. “It’s a way to get more pockets around the table and share the risk,” said Steven Tregay, former managing partner at Novartis Option Fund and current CEO of Forma Therapeutics Inc. An equity financing is an attractive alternative for a pharmaceutical company that is interested in an early-stage technology, but doesn’t want the full risk associated with a partnership or a licensing deal.
Corporate venture capitalists say they are seeing an uptick in applications from biotech companies as other funding sources remain constrained.
“There is certainly more activity evaluating possible investments. We are seeing opportunities we wouldn’t have seen in more affluent times,” said Maggie Flanagan LeFlore. LeFlore is managing director at MedImmune Ventures, an arm of MedImmune Inc., which is a subsidiary of AstraZeneca plc. The venture arm has $300 million under management and has invested $200 million, including investments in Cambridge-based Hydra Biosciences Inc. and Lexington-based Inotek Pharmaceuticals Corp.
Some corporate VC arms have found that a recession is a good time to raise their profiles. Genzyme Corp.’s Genzyme Ventures has $100 million under management and managing director Alan Walts said that about $60 million is currently invested. Genzyme Ventures has made direct investments in a dozen companies, including Cambridge’s Proteostasis Therapeutics.
Two companies in the medical space that have venture arms in Massachusetts aren’t currently invested in New England firms. Siemens Venture Capital has its health-care sector based in Boston and Covidien Ventures launched a year ago from Covidien plc’s local headquarters in Mansfield. Covidien Ventures has since made two investments, one in Minnesota, and another in California. Covidien Ventures does not have a fund under management and makes investments on a case-by-case basis. The group has just added a fourth partner to the mix, who is based in California.
Comments
If you are commenting using a Facebook account, your profile information may be displayed with your comment depending on your privacy settings. By leaving the 'Post to Facebook' box selected, your comment will be published to your Facebook profile in addition to the space below.
RSS Feeds
