After years of investing Bill Gates’s money and giving him scientific advice, two of the software billionaire’s associates have launched their own $200 million healthcare fund. Some of biotech’s highest-profile bets are already in their portfolio.
Based in Seattle, Biomatics Capital Partners has been an open secret for some time thanks to its own regulatory filings and name-dropping in other people’s press releases.
The fund’s leaders are Boris Nikolic, who was Gates’s science advisor until 2015, and Julie Sunderland, who ran the nonprofit Bill and Melinda Gates Foundation’s investment program until 2016. Under Sunderland, the program expanded from grant-making into private-sector investments to spur the development of vaccines and other technology for global health. She oversaw more than a dozen investments in biotech firms, such as this one.
Nikolic and Sunderland are for-profit investors now. Before Biomatics began raising its first fund, Sunderland says the two invested their own money in eight companies. It was a demonstration, of sorts, to show prospective funders that they were committed to investing in health-related companies, from therapeutics to diagnostics to healthcare data security, which capitalize upon what Sunderland calls the “explosion of genomic and digital data.”
Those eight investments will roll over into the Biomatics portfolio, says Sunderland. She and Nikolic will continue to have a stake as general partners. But they will not be limited partners, who have a different set of rights.
Nikolic has already been publicly linked to at least two of the companies: DNA maker Twist Bioscience of San Francisco and AiCure of New York. His most high profile investment came in 2015, when he led a one-off vehicle, bng0, that included Gates and what was described at the time as “family offices.” Bng0’s sole purpose was to lead a round of funding for Editas Medicine (NASDAQ: [[ticker:EDIT]]) of Cambridge, MA. Nikolic is on the gene-editing company’s board of directors. Because Nikolic’s stake came through bng0, Editas is not in Biomatics’ portfolio.
Biomatics does own shares, however, of two of the most lavishly funded biotech startups in history, the cancer blood-testing firm Grail and Denali Therapeutics, which is developing treatments for neurodegeneration. Grail recently said it has raised a $900 million Series B round, with more to come.
Biomatics aims to invest in 15 or 20 companies total, with $10 million to $15 million allotted to each. When asked how to maintain its positions as much bigger investors move in, Sunderland says Biomatics has “strong relationships” with its companies and influence beyond its ownership positions.
Acknowledging that high-risk drugs and diagnostics can take a long time to reap rewards, Sunderland says Biomatics wants to balance its portfolio with shorter-term paths to revenue, such as an investment in Blue Talon, a healthcare data-security firm. Its portfolio also includes Aledade, a healthcare data firm, BlackThorn Therapeutics, which is developing drugs for neurobehavioral diseases, and DNA sequencing firm Omniome.
Seattle photo by Tiffany Von Arnim via Creative Commons 2.0 license.
