Investors enthusiastically back development of biopharmaceuticals.

venBio Partners LLC is a life sciences firm that partners with industry leaders to build highly innovative medicines and technologies. It focuses on novel therapeutics for unmet medical needs.

venBio announced the closure of its venBio Global Strategic Fund III, a third life sciences venture capital fund. The fund exceeded its target and raised approximately $394 million in capital commitments.

Oversubscription shows interest in biotech

venBio Fund III will continue to invest in therapeutics companies that are developing biopharmaceuticals for unmet medical needs.

Interestingly the response to venBio’s new fund shows heightened investor interest in the biotech sector, perhaps a fallout of the COVID-19 pandemic.

Last month, investors plowed $1.1 billion into VC fund Flagship Pioneering and $1.46 billion in Arch Venture Partners. These funds aim to invest the funds in sustainability and biotech.

venBio Fund III

Both existing and new investors participated in the fundraising. Institutional investors included pharmaceutical companies, corporate pensions, financial institutions, endowments and foundations, family offices and funds-of-funds.

venBio Fund III is led by Managing Partners Corey Goodman, Ph.D., Robert Adelman, M.D., and Aaron Royston, M.D.

“We remain committed to our founding strategy at venBio, namely to turn great science into impactful medicine,” said Dr. Goodman. “Our investment thesis, regardless of the stage of the company, remains to look for investment opportunities with a 3- to 5-year time horizon.”

The firm generally leads or co-leads investments in portfolio companies and takes an active role in their development.

“In addition to generating strong financial returns, we’re proud of the impact our portfolio companies have made on patients,” said Dr. Royston. “We’ve actively helped build three companies that have developed approved drugs that are on the market today.”

Disciplined investing

It’s creditable that investors voted with their checks in favor of the new fund despite fears of a looming recession.

According to Xconomy, venBio’s investing philosophy assumes an exit via an M&A transaction, not an IPO. These guidelines have remained unchanged since it launched its first fund.

venBio, therefore, looks for candidates that would be able to generate returns within three to five years – typically by the end of Phase 2 testing.

These parameters require venBio to be very selective and disciplined in its investing. Knowing of this approach, investors did not hesitate to commit to the new fund despite the environment.

Portfolio

Till date, venBio has raised about $1 billion.

Investments in 29 companies include Labrys Biologics (acquired by Teva), Aragon Pharmaceuticals (acquired by Johnson & Johnson), Seragon Pharmaceuticals (acquired by Roche), Aurinia Pharmaceuticals (NASDAQ: AUPH), Apellis Pharmaceuticals (NASDAQ: APLS), Turning Point Therapeutics (NASDAQ: TPTX), Precision Biosciences (NASDAQ: DTIL) and Akero Therapeutics (NASDAQ: AKRO).

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