The life sciences VC sector is rousing after a decade on the sick bed, as public markets are picking up and large corporations are opening the wallets for acquisitions.
Well placed to capitalize on this is London-based Abingworth, which has just raised £225 million ($376 million) for its Abingworth Bioventures VI fund, following two years of fundraising.
If that seems a protracted affair, Abingworth had actually raised most of its original £200 million target by mid-2012, but continued to fundraise as it was forced to wait on a single commitment until this year.
Equally focused on Europe and the United States, the fund will invest from £5 million to £20 million per company across the life sciences spectrum.
Likewise, all types of deals are open to the fund, from early-stage investment up to growth equity and even public equity funding. However, within that range, there will be a shift from growth equity to venture growth funding, targeting companies that are nearing product launch.
“The next decade is going to be phenomenal for life sciences, with the number of clinical trials and the number of data readouts that are going to come through,” Stephen Bunting, Abingworth’s managing partner, told VCJ.
The new fund will also offer more structured finance to big pharmaceutical companies developing late-stage assets, a strategy begun towards the end of the investment period of its 2007-vintage, £308 million predecessor.
Unlike some of Abingworth’s previous funds, however, Bioventures VI doesn’t include any pharmaceutical LPs and instead relied on funds-of-funds and pension funds for most of its capital.
Nonetheless, Bunting welcomes a growing corporate presence in the venture market.
Stephen Bunting, Abingworth
Source: Photo courtesy of Abingworth
“We co-invest with pharmaceutical companies more than we have in the past, so that’s been a very good marriage, particularly as they have a lot of knowledge of drug discovery and development.”
He is also hopeful about improving IPO prospects in the United Kingdom, and remains fairly unconcerned about any softening of the United States’ recently bullish markets.
“There’s a huge difference between the present life sciences boom and what happened in 1992 and in 2000 when there was a lot of excitement around the human genome and money quickly poured into the sector and then poured out,” he said.
Abingworth saw three of its companies go public last year and Bunting believes that further IPOs are key to attracting investors back to life sciences venture capital.
In Europe, he wants to see fresh capital channelled towards maturing companies rather than startups.
“It’s not so difficult to start a company, it’s difficult to finish a company, and that’s the bit that needs to be bitten onto.”
Alex Derber is a London-based contributor. He can be reached at alexderber@hotmail.com.
