HealthQuest Capital Raises $110M for Debut Fund with Medtech Focus

Garheng Kong HealthQuest Capital

new drug therapies for Sofinnova.

HealthQuest intends to target areas where there are clear unmet clinical needs for innovation as well as undercapitalized geographies. “A lot of these companies are quite capital efficient,” Kong said. “The deal sets are equally likely to be spread across the country as they are to be in the Bay Area or Boston. We’re open-minded about where these companies can be and need to be formed. If your business is focused on hospitals, you’re likely to be in Nashville, TN. If you’re focused on orthopedics, you’re probably in Warsaw, IN.”

The fund was created last fall and has invested in the following companies:

—Orlando, FL-based Vestagen Technical Textiles, which specializes in fabrics and apparel for healthcare workers that are comfortable, designed to repel liquids, and engineered with anti-microbial properties to minimize the chances of spreading infections. HealthQuest invested more than $3 million in Vestagen, Kong said.

—Burlingame, CA-based First Aid Shot Therapy, which has been developing over-the-counter remedies formulated as a liquid shot to treat everyday conditions such as pain and upset stomach. HealthQuest invested about $15 million in the company, also known as F.A.S.T.

—Friendswood, TX-based Castle Biosciences has been developing molecular diagnostic tests to help doctors determine the optimal treatment for patients with uveal melanoma, cutaneous melanoma, esophageal cancer, thymic cancers, mesothelioma and gliomas. HealthQuest led an $11.8 million round that included Mountain Group Capital and Longfellow Venture Partners.

Kong, was previously a general partner at Sofinnova Ventures, and will continue to manage some Sofinnova investments. But as the founder and managing partner at HealthQuest, he will not be making any new investments for Sofinnova. Some of his deals include Cellective Therapeutics (acquired by AstraZeneca), Novamin Technologies (acquired by GlaxoSmithKline), Cempra Pharmaceuticals (Nasdaq: [[ticker:CEMP]]), Serenex (acquired by Pfizer) and Alimera Sciences (Nasdaq: [[ticker:ALIM]]). Kong also sits on the board of Laboratory Corporation of America (NYSE: [[ticker:LH]]) and the Duke University Medical Center Board of Visitors.

Oher members of the HealthQuest investing team are partner Randy Scott, a medical technology entrepreneur based in Gainesville, FL, and venture partner Tom Callaway of Atlanta, GA, who founded a life sciences executive search firm in Atlanta.

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Author: Bruce V. Bigelow

In Memoriam: Our dear friend Bruce V. Bigelow passed away on June 29, 2018. He was the editor of Xconomy San Diego from 2008 to 2018. Read more about his life and work here. Bruce Bigelow joined Xconomy from the business desk of the San Diego Union-Tribune. He was a member of the team of reporters who were awarded the 2006 Pulitzer Prize in National Reporting for uncovering bribes paid to San Diego Republican Rep. Randy “Duke” Cunningham in exchange for special legislation earmarks. He also shared a 2006 award for enterprise reporting from the Society of Business Editors and Writers for “In Harm’s Way,” an article about the extraordinary casualty rate among employees working in Iraq for San Diego’s Titan Corp. He has written extensively about the 2002 corporate accounting scandal at software goliath Peregrine Systems. He also was a Gerald Loeb Award finalist and National Headline Award winner for “The Toymaker,” a 14-part chronicle of a San Diego start-up company. He takes special satisfaction, though, that the series was included in the library for nonfiction narrative journalism at the Nieman Foundation for Journalism at Harvard University. Bigelow graduated from U.C. Berkeley in 1977 with a degree in English Literature and from the Columbia University Graduate School of Journalism in 1979. Before joining the Union-Tribune in 1990, he worked for the Associated Press in Los Angeles and The Kansas City Times.