Healthcare investment firm LSP has raised what it says is the largest ever European fund focused on life sciences ventures.
The Amsterdam, Netherlands-headquartered firm aimed to bring in $450 million in the final fundraiser for its LSP 6 life science private equity fund but has ended up with $620 million (€550 million) to invest in European firms developing new medications or medical technologies.
Of the approximately 1,000 potential investment deals LSP receives each year, the company typically invests in only about five, says René Kuijten, the firm’s managing partner and co-owner. He tells Xconomy that LSP expects to invest in 15 to 18 private, mostly Europe-based companies, developing a range of drugs for both large indications and rare diseases, over the next three years.
Previous funding has seen LSP invest in firms including Netherlands-based AM Pharma, which is developing a treatment for acute kidney injury based on its recombinant human Alkaline Phosphatase therapeutic platform; UK-based Artios, which is tackling difficult-to-treat cancers using its protein signaling pathway and DNA repair technology; and France’s Alizé Pharma, which is developing a parathyroid hormone (PTH) hormone replacement therapy for hypoparathyroidism and a first-in-class therapy for the treatment of syndromes of severe insulin resistance. LSP’s portfolio also includes Arvelle Therapeutics, a firm spun-out from Axovant Sciences looking to commercialize anti-epilepsy small molecule drug cenobamate (Xcopri) approved by the FDA last November.
This round of fundraising is LSP’s largest to date and builds on the $280 million raised for the firm’s Health Economic Fund launched in 2017 with a focus on late-stage medtech.
The capital came from LSP’s investor base, which includes pension funds, insurance companies, wealth managers, the European Investment Fund and family offices. But the fund also has backing from New York-based pharma giant Bristol-Myers Squibb (NYSE: [[ticker:BMY]]) and Japan’s Otsuka Pharmaceutical, which Kuijten says further validates LSP’s market position.
“Bristol and Otsuka’s involvement are a sign of a fact that they are interested in the European life sciences sector,” he says. “They don’t have teams on the ground in Europe and so we can be their eyes and ears in evaluating the 1,000 or so potential deals.”
LSP 6 is being touted as the largest fund ever raised in Europe focused on life sciences biotech ventures, and according to Kuijten is evidence of the robust European R&D landscape. “The number of high-quality life sciences innovations in Europe is similar to the United States but there is five times less capital available to back these innovators and entrepreneurs,” he says.
The fund follows a year of increasing fundraising in the European healthcare space. In July 2019, Medicxi raised €400 million ($453 million) with backing from Novartis (NYSE: [[ticker:NVS]]) and Johnson & Johnson Innovation to invest in early and late-stage European biopharma companies. Meanwhile, France’s Sofinnova Partners raised €330 million ($374 million) to invest in life science and information technology firms in Europe.
And in December, London, UK-based GHO Capital raised a record €975 million ($1.1 billion), though the company intends to invest in outsourced services providers on which many smaller biotech companies rely, rather than directly in biotech companies themselves.
Image: iStock/Oleg Elkov