It occurred to me that Partners Innovation Fund, unlike all other venture investors I can think of, knows exactly where it will find its future deals. That’s because the fund, launched by Massachusetts General and Brigham and Women’s hospitals last year, invests exclusively in startups with science from the two Harvard-affiliated hospitals. And given that the combined annual research budgets of MGH and Brigham exceed $900 million, it’s an opportunity-rich pool in which to fish for deals.
Partners Innovation Fund, which is managed by Partners HealthCare, the private health care system based in Boston, focuses on seed investments in startups primarily in their infancy and aims to attract investments from traditional venture capitalists to the companies as well (Read on for more specifics of the fund’s investment goals). In light of the current capital constraints on the biotech industry, which Luke captured in this post last week, the Partners fund plays an increasingly important role in capitalizing startups in their earliest stages, as many VCs now seem to be steering away from such deals in order to invest in later-stage firms.
“I think it really does make a difference for Partners and the hospital to have some skin in the game early on,” says Chris Colecchi, vice president of research ventures and licensing at Partners, which manages Brigham and MGH. “I think it’s a clear message to our own community [of researchers] that we are supporting entrepreneurial and scientific endeavors—and it’s a clear sign to others that we are willing to make an additional investment other than patent costs.”
To be clear, venture capitalists and drug companies have swooned over discoveries made at MGH and Brigham for decades. Most famously, MGH biologist Brian Seed’s discoveries related to fusion proteins led to the development of blockbuster arthritis drug etanercept (Enbrel). In fact, MGH says it reeled in $284 million last year through the sale of rights to all future ex-U.S. royalties on etanercept sales.
It’d be a tall order to expect one of the startups in the Partners fund’s portfolio to match the success of etanercept, and it’s way too early to tell which among them will be successes. However, I thought it would be worth giving brief overviews of those endeavors.
Here’s a list of the companies in the fund’s portfolio (or at least those startups it would reveal):
