MPM Capital Closes $550 Million BioVentures IV Healthcare Venture Fund
Monday March 5, 6:00 am ET
BOSTON & SAN FRANCISCO--(BUSINESS WIRE)--MPM Capital, L.P., a global investment management firm focused solely on healthcare investing, today announced the closing of MPM BioVentures IV with $550 million of committed capital. The closing of MPM BioVentures IV brings funds under active management at MPM Capital to more than $2.5 billion. Similar to MPM's prior funds, the investors in MPM BioVentures IV include a mix of financial and strategic Limited Partners (LPs). Returning LPs, including GE Healthcare Financial Services, Itochu, the Kauffman Foundation and Scottish Widows Investment Partnership, comprise over half of the committed capital. New investors include AlpInvest, Dow Employees' Pension Plan, Skandia and Union Carbide Employees' Pension Plan. Atlantic-Pacific Capital, Inc. served as the placement agent for MPM Capital in the marketing of the fund.
MPM Capital indicated that the new fund made its first investment in the second quarter of 2006, and since then its team has actively been building the portfolio which now consists of seven companies. Fueled by the early strong performance of two of these companies -- Memory Pharmaceuticals (Nasdaq:MEMY - News) and Peplin (ASX:PEP - News) - MPM BioVentures IV is already generating a double digit IRR (internal rate of return) for its investors. MPM also announced in January its co-lead of an investor group that has agreed to purchase the injectable business of SkyePharma PLC (LSE:SKP - News; NASDAQ:SKYE - News).
"Our LPs reacted particularly positively to our proven ability to invest across the full spectrum of company stages and our reinforced capabilities and commitment to support our companies not only in discovery but also in clinical development and commercialization. With this fund, we will continue to take a leadership role in financing the most promising healthcare companies in the U.S. and abroad," said Luke Evnin, Founding General Partner. "We are very pleased with the support from, and enthusiasm shown by, the LP community for this fund."
According to Founding General Partner Ansbert Gadicke, "The past decade has seen dramatic changes in biotech as well as changes in the venture industry. From inception, our strategy has been to apply creativity, domain expertise and scale to make investments that would produce superior returns in dynamic markets. We anticipated from the beginning that no single formula would be appropriate for generating attractive exits. When we launched MPM, IPOs were the preferred exits; more recently, M&A has provided superior returns, and we have successfully established ourselves as a preferred partner for the leading large consolidators in the healthcare industry. With an eye towards value creation, we have delivered on our commitment to our investors by building commercial and development stage companies that are attractive to the pharmaceutical industry as well as the public markets, such as Idenix (Nasdaq:IDIX - News), Rinat, Idun, Cotherix, and Affymax (Nasdaq:AFFY - News) in the U.S. and Biovitrum (BVT.ST), Omrix (Nasdaq:OMRI - News) and Intercell (ICLL.VI) in Europe."
...Investment Strategy
MPM BioVentures IV intends to spread its investments among biotechnology and medical technology products, across the life-cycle of entrepreneurial companies, with 85% focused on biotech and specialty pharmaceuticals and 15% on medtech, tools and diagnostics. The fund's charter also allows its participation in private equity offerings of publicly traded companies (PIPEs). The fund's preferred investment size will be in the range of $20 million - $50 million per company.
"Over the last five years," said Evnin, "we've led the industry in providing significant resources to our portfolio companies to enable them to achieve Phase 2 clinical success, to launch commercial product(s) and/or to transform their pipeline by combining assets with other entities. In the new fund, we're poised to make investments across a similar spectrum and scale, with capacity to participate in larger, later-stage opportunities. With the broadest and deepest team in the industry, we have created an in-house team that possesses not only investment and scientific prowess but also expertise in building leading clinical and commercial stage companies.
"Further, adding the clinical and commercial stage talent to the team and bringing that talent in-house is what we believe is now needed to be a successful venture capital healthcare investor; we have learned that a deep understanding of chemistry and biology is no longer enough," he said.
Gadicke commented, "Our plan is to build a portfolio of approximately 20 companies through investments in both proven teams and in companies that we identify as 'diamonds in the rough.' In the latter, we expect to lend MPM's talent to the companies on a temporary basis to add expertise in clinical development or commercial launch planning or to play senior management roles.
"The fund expects to invest roughly 80% of its assets in the U.S. and 20% in Europe and Asia. True globalization, beyond the U.S. and Europe, into ROW markets, for example, China and India, is an emerging theme as the pharmaceutical industry expands its bases for research, clinical development and seeks new markets to penetrate. With MPM BioVentures IV, we're poised to execute creatively on opportunities in these markets where biotech and the pharmaceutical industries are just beginning to take shape," he noted.
...Investment Team
The eight General Partners of MPM BioVentures IV are Ashley Dombkowski, Luke Evnin, Ansbert Gadicke, William Greene, Vaughn Kailian, Jim Scopa, Steven St. Peter and John Vander Vort. The eight general partners work closely with one of the largest and deepest dedicated healthcare teams in the investment community, consisting of five executive partners, seven venture partners, and senior advisors, including Nobel Laureates David Baltimore, Ph.D. and Robert Horvitz, Ph.D. as well as Dr. Edward Scolnick, former President of Merck Research Labs and a Director of Merck & Co.; George Daley, M.D., Ph.D., Associate Professor at Harvard Medical School, and staff Dana Farber Cancer Institute, and Brigham and Women's Hospital; and Frank Baldino, Ph.D., Chairman and CEO of Cephalon. MPM's Executive Partners include Ed Mascioli, M.D., Gary Patou, M.D., Kazumi Shiosaki, Ph.D. and Dave Stack. |
