Whereas there’s no lack of venture dollars for US biotechs these days, their European counterparts are still dealing with an “ongoing undersupply” of capital — at least according to the Europe-based VCs at Forbion Capital. And they are addressing the problem head-on with $316 million (€270 million) they just raised.
Marking the first close of its fourth fund — which had an original target of $292 million (€250 million) — the money from new and existing investors will allow the firm to bet on around 15 companies with a hands-on approach. The ideal portfolio will feature five companies built from scratch at Forbion (“build” opportunities) and 10 others that it thinks it can help transform into high-return businesses (“growth” opportunities).
In most cases, that will mean commanding a lead position in the biotech companies — anywhere from 20% to 50% — and working closely with the founders, just as they have done in their $200 million-plus Forbion III.
This is the third European biotech venture fund to land today, totaling more than $900 million.
If Forbion learn anything from their last fund, it is that “(bio)pharma is the most lucrative sector in life sciences. Companies with novel products and technologies get acquired early on and public markets have been very receptive,” says Sander Slootweg, who has been tapped to manage the fund with Geert-Jan Mulder and Martien van Osch.
While the fund is explicitly Eurocentric, 20% of Forbion IV will be allocated to North American businesses.
Slootweg sees the European biotech scene as “very healthy,” with only public markets lagging somewhat behind the US — which isn’t really that much of a problem when you consider the relative ease for foreign issuers to list on the Nasdaq.
He would know. Of the companies Forbion wagered on in its last run, brain disorder drugmaker Prexton Therapeutics was sold to Lundbeck for $1.1 billion (€905 million); NASH player Arkarna was picked up by Allergan with a $50 million upfront; I/O biotech Rigontec was acquired by Merck for $554 million (€463 million); and another I/O startup, Replimune, recently joined the US biotech IPO fiesta, raising $100 million.
We will have to wait until this fall, when Forbion aims to close the fund, to learn more about the investments that they ultimately decide to go with. But the team has already identified quite a few of them, spanning areas such as the microbiome, inflammation, cardiovascular and metabolic disease, Slootweg tells me.
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