Eli Lilly partner TVM Capital raises $478M for their new life sciences fund, a 'substantial' oversubscription
A German-Canadian VC fund and high-profile Eli Lilly partner has nearly half a billion dollars in new cash to play with.
TVM Capital Life Science, based out of Munich and Montreal, announced the closing of its second and latest fund Tuesday with $478 million in hand. That total represents a “substantial” oversubscription, managing partner Stefan Fischer said, and a good 36.5% more than the $350 million initially expected.
“We had agreed upfront that we feel comfortable raising $350 [million], and we set a hard cap at $450 [million],” Fischer told Endpoints News. “Now that we’re ending up at $478 [million], I think that speaks a clear language. We were shooting a little bit lower but there was strong demand and strong interest, so what can I say? $478 [million] is a fantastic outcome.”
Fischer also serves as CFO of the firm and runs it with two colleagues, Luc Marengère and Hubert Birner. For the past decade, Fischer said, the trio has steered the company away from the traditional VC model of building up big syndicates and mainly toward single-asset biotechs who are at or nearing the IND-enabling phase, but they still invest in programs in later stages.
The new fund will invest in about 16 to 18 such companies that are at or before Phase I and TVM will end up as the majority shareholder. On top of that, TVM will likely invest in 10 to 12 late-stage companies, and the fund is expected to run for about 10 years.
It’s all part of the TVM model that focuses on “PFCs,” or project funded companies. Two of the company’s most prominent exits, CoLucid and AurKa, are proof the model works, Fischer said.
CoLucid was swallowed by Lilly in 2017 for $960 million at a 33% premium, and the big prize from the deal was lasmiditan — an oral 5-HT agonist originally developed by Lilly and then out-licensed to CoLucid in 2005. AurKa, meanwhile, was acquired by Lilly in 2018, netting the pharma an Aurora kinase A inhibitor for $576 million.
Lilly and TVM have been a team for many years, and the firm boasts exclusive access to the drugmaker’s Lilly Chorus R&D group, Fischer said. The relationship allows TVM and Lilly to collaborate on development plans for potential investments, and then the work itself is outsourced to third party service providers.
“There’s no other group at any other pharma partner like Chorus, so it’s kind of a unique proposition, I would say. Having access to such a group for us is a very important part of our investment strategy,” Fischer said. “They have done their due diligence on the venture world in the US and Europe, and I’m proud to say that we are one of the chosen ones.”
Now comes the investments themselves, and TVM is off to a fast start. The fund sold its first investment in February of this year, and Fischer is ready for more.
“We are in investing mode,” he said.