Another early-stage biotech investor has clocked in with a new fund. London-based Advent Life Sciences said Tuesday it has closed a $235 million vehicle, its second specialized fund since the tech and life science investors of Advent Venture Partners went separate ways last decade.
The firm used to invest in tech and life sciences from a single fund, Advent Life Sciences general partner Raj Parekh said. But in the middle of last decade, as the old Advent began what Parekh (pictured) called a “generational handover,” the tech side looked toward mid-market, growth equity investments, while the life sciences partners wanted to be involved in company formation.
Advent’s evolution is part of a larger trend toward venture specialization in recent years, which I explored last week. Atlas Venture’s decision to split its tech and biotech teams is the most recent example. As for Advent, keeping the teams together under one roof would have made for “a product offering quite different from previous Advent funds,” said Parekh.
The second life sciences-only fund will be a bi-continental effort, with three of the firm’s partners based in the U.S.: Donald Drakeman is based in Princeton, NJ, and best known for co-founding antibody companies Medarex and Genmab; Alan Walts, who spent most of his biopharma career in various roles at Genzyme, is in Boston; and Dale Pfost, a biotech veteran who spends time on both East and West Coasts.
As a ballpark guideline, the firm spreads its investments around, with one third in the U.S., one third in the U.K., and one third in continental Europe.
The fund closed faster than expected and will begin investment in the coming months, Parekh said. Overall, Advent will aim for about 15 companies in the new portfolio, mainly starting with seed and Series A rounds. “We prefer to come in and help shape companies” with syndicate partners, Parekh said. He added that the firm’s early-stage description refers more to its preference for a company’s financing stage, not the age of its underlying technology, but Advent tends to look for riskier technology as well.
In their previous two funds, “we’ve only done one Big Pharma spinout,” Parekh said, referring to Nerre Therapeutics, which Advent co-founded around a portfolio of preclinical and clinical assets from GlaxoSmithKline. The lead product entered Phase 2 testing in early 2014 as a treatment to alleviate the intense itching known as pruritus that certain cancer regimens can trigger.
Advent Life Sciences closed its first dedicated fund at $158 million in 2011. The final Advent diversified fund, which closed in 2006, so far has produced three new therapeutic products and two medical device products either brought to market by the portfolio companies themselves or their acquirers. Some of its big exits or milestones include the $350 million acquisition of Avila Therapeutics by Celgene in 2012; Jazz Pharmaceuticals’ $650 million purchase of EUSA Pharma in 2012; Bayer Healthcare’s $2.9 billion buyout of Norwegian cancer drug maker Algeta, which closed this year; and the March 2014 IPO of Versartis, of which Advent owned 9.3 percent after the market debut. Shares opened at $21 apiece and rose quickly at first, but have come back down below that initial mark, ending Monday at $19.49.
