MPM Capital Closes $550 Million BioVentures IV Healthcare Venture Fund
BOSTON & SAN FRANCISCO--(BUSINESS WIRE)--MPM Capital, L.P., a global investment management firm focused solely on healthcare investing, today announced the closing of MPM BioVentures IV with $550 million of committed capital. The closing of MPM BioVentures IV brings funds under active management at MPM Capital to more than $2.5 billion. Similar to MPM’s prior funds, the investors in MPM BioVentures IV include a mix of financial and strategic Limited Partners (LPs). Returning LPs, including GE Healthcare Financial Services, Itochu, the Kauffman Foundation and Scottish Widows Investment Partnership, comprise over half of the committed capital. New investors include AlpInvest, Dow Employees' Pension Plan, Skandia and Union Carbide Employees' Pension Plan. Atlantic-Pacific Capital, Inc. served as the placement agent for MPM Capital in the marketing of the fund.
“Further, adding the clinical and commercial stage talent to the team and bringing that talent in-house is what we believe is now needed to be a successful venture capital healthcare investor; we have learned that a deep understanding of chemistry and biology is no longer enough”
MPM Capital indicated that the new fund made its first investment in the second quarter of 2006, and since then its team has actively been building the portfolio which now consists of seven companies. Fueled by the early strong performance of two of these companies -- Memory Pharmaceuticals (Nasdaq:MEMY) and Peplin (ASX:PEP) – MPM BioVentures IV is already generating a double digit IRR (internal rate of return) for its investors. MPM also announced in January its co-lead of an investor group that has agreed to purchase the injectable business of SkyePharma PLC (LSE:SKP) (NASDAQ:SKYE).
“Our LPs reacted particularly positively to our proven ability to invest across the full spectrum of company stages and our reinforced capabilities and commitment to support our companies not only in discovery but also in clinical development and commercialization. With this fund, we will continue to take a leadership role in financing the most promising healthcare companies in the U.S. and abroad,” said Luke Evnin, Founding General Partner. “We are very pleased with the support from, and enthusiasm shown by, the LP community for this fund.”
According to Founding General Partner Ansbert Gadicke, “The past decade has seen dramatic changes in biotech as well as changes in the venture industry. From inception, our strategy has been to apply creativity, domain expertise and scale to make investments that would produce superior returns in dynamic markets. We anticipated from the beginning that no single formula would be appropriate for generating attractive exits. When we launched MPM, IPOs were the preferred exits; more recently, M&A has provided superior returns, and we have successfully established ourselves as a preferred partner for the leading large consolidators in the healthcare industry. With an eye towards value creation, we have delivered on our commitment to our investors by building commercial and development stage companies that are attractive to the pharmaceutical industry as well as the public markets, such as Idenix (Nasdaq:IDIX), Rinat, Idun, Cotherix, and Affymax (Nasdaq:AFFY) in the U.S. and Biovitrum (BVT.ST), Omrix (Nasdaq:OMRI) and Intercell (ICLL.VI) in Europe.”
MPM BioVentures IV intends to spread its investments among biotechnology and medical technology products, across the life-cycle of entrepreneurial companies, with 85% focused on biotech and specialty pharmaceuticals and 15% on medtech, tools and diagnostics. The fund’s charter also allows its participation in private equity offerings of publicly traded companies (PIPEs). The fund’s preferred investment size will be in the range of $20 million - $50 million per company.
“Over the last five years,” said Evnin, “we’ve led the industry in providing significant resources to our portfolio companies to enable them to achieve Phase 2 clinical success, to launch commercial product(s) and/or to transform their pipeline by combining assets with other entities. In the new fund, we’re poised to make investments across a similar spectrum and scale, with capacity to participate in larger, later-stage opportunities. With the broadest and deepest team in the industry, we have created an in-house team that possesses not only investment and scientific prowess but also expertise in building leading clinical and commercial stage companies.
“Further, adding the clinical and commercial stage talent to the team and bringing that talent in-house is what we believe is now needed to be a successful venture capital healthcare investor; we have learned that a deep understanding of chemistry and biology is no longer enough,” he said.
Gadicke commented, “Our plan is to build a portfolio of approximately 20 companies through investments in both proven teams and in companies that we identify as ‘diamonds in the rough.’ In the latter, we expect to lend MPM’s talent to the companies on a temporary basis to add expertise in clinical development or commercial launch planning or to play senior management roles.
“The fund expects to invest roughly 80% of its assets in the U.S. and 20% in Europe and Asia. True globalization, beyond the U.S. and Europe, into ROW markets, for example, China and India, is an emerging theme as the pharmaceutical industry expands its bases for research, clinical development and seeks new markets to penetrate. With MPM BioVentures IV, we’re poised to execute creatively on opportunities in these markets where biotech and the pharmaceutical industries are just beginning to take shape,” he noted.
The eight General Partners of MPM BioVentures IV are Ashley Dombkowski, Luke Evnin, Ansbert Gadicke, William Greene, Vaughn Kailian, Jim Scopa, Steven St. Peter and John Vander Vort. The eight general partners work closely with one of the largest and deepest dedicated healthcare teams in the investment community, consisting of five executive partners, seven venture partners, and senior advisors, including Nobel Laureates David Baltimore, Ph.D. and Robert Horvitz, Ph.D. as well as Dr. Edward Scolnick, former President of Merck Research Labs and a Director of Merck & Co.; George Daley, M.D., Ph.D., Associate Professor at Harvard Medical School, and staff Dana Farber Cancer Institute, and Brigham and Women’s Hospital; and Frank Baldino, Ph.D., Chairman and CEO of Cephalon. MPM’s Executive Partners include Ed Mascioli, M.D., Gary Patou, M.D., Kazumi Shiosaki, Ph.D. and Dave Stack.
About Atlantic-Pacific Capital, Inc.
With offices in North America, Europe and Asia, Atlantic-Pacific Capital, Inc. is a leading global placement agent solely dedicated to raising capital for alternative investment funds and direct private placement transactions. Typical projects include private equity, real estate and hedge fund placements, as well as private placement financings in support of acquisitions, buy-outs and growth capital transactions. Founded in 1995, Atlantic-Pacific has raised in excess of $28 billion for its clients and has developed relationships with over 4,000 alternative investors worldwide. For more information, visit www.apcap.com.
About MPM Capital
MPM Capital L.P. is a global investment management firm focused solely on life sciences investing. One of the largest investment management firms dedicated to the life sciences sector, MPM Capital has offices in Boston, San Francisco and New York City. MPM’s portfolio ranges from start-ups to large capitalization public companies, with a primary focus on biopharmaceutical and medical device companies nearing commercialization of products or those companies that already offer product-driven opportunities. The firm manages over $2.5 billion in assets through the MPM BioVentures Family of venture capital funds and the MPM BioEquities public market fund. More information on MPM can be found at www.MPMCapital.com.
NOTE TO EDITORS:
The following are other quotes from General Partners that may be used in news stories:
Dr. Ashley Dombkowski, General Partner
“Medical device investing continues as a critical component of our strategy. This is particularly true given the pressures on large and even mid-sized device companies to replenish their pipelines with innovative, high-growth products. We have seen that if a device company has compelling proof-of-concept clinical trial results, and if the potential product looks like it could be a block-buster, it may not need to go all the way to IPO to produce superior returns for its investors, given that M&A in the device arena is as competitive as ever. Particularly interesting today is the way innovation is creating new block-buster categories – indication areas where there are large prevalence numbers and high unmet medical needs – but where in the past device interventions simply were not mature enough to have an impact on the disease state. This is opening up whole new categories that we are looking at and investing in, alongside the core therapeutic categories where device innovation has traditionally occurred. Furthermore, if we find a device company that needs support either preparing for a product launch or in developing a clinical plan that will yield robust data, we’re prepared to play an active role in that company’s management and to drop in, if it might help, our in-house talent to help support management’s efforts.”
Dr. Ansbert Gadicke, Founding General Partner
“When we look back at what we accomplished, we have made our vision reality. We were, are, and always will be trend setters and trend spotters; we’ve led changes in how healthcare venture capitalists invest, and we’re continuing to identify new themes that underscore our commitment to innovative investing, and allow ourselves to dedicate our distinctive resources to drive those companies to success.”
Dr. William Greene, General Partner
“The strategic investors who have invested in our new fund represent industrial giants from Europe and Asia. Their support of our efforts validates our past performance and our commitment to finding creative, innovative ways to invest our money both within and beyond the U.S. border. The globalization of the biotechnology and pharma industries is far more than “outsourcing,” and MPM is well positioned to lend support and experience as the worldwide life science industry creates jobs, improves healthcare access, and provides new avenues for value generation.”
Vaughn Kailian, General Partner
“Ten years ago, healthcare venture funds established a niche – in seed, early, mid- or late-stage investing. Instead of a stage-specific approach, we were among the first to invest across the life cycle of companies. To do this well, we rejected the notion that venture capitalists needed to surround themselves with consultants. Instead, we built an in-house team with operations expertise that was deeper than the teams of any competitors. In fact, it’s the MPM team that differentiates us from our competitors. There is no other VC that has the operational expertise and the company track-record of our team.”
Jim Scopa, General Partner
“MPM was one of the first dedicated healthcare VCs to source products and technologies on a global basis and finance the companies publicly and privately in Europe and the Far East. Despite the prevailing view that exit opportunities in the European capital markets are less attractive, MPM has successfully achieved liquidity with European companies in local capital markets such as Austria, Sweden and Switzerland. This trend continues in the current fund where we have sourced product technology in Australia and in Israel.”
Steven St. Peter, General Partner
“The boundaries of venture capital have extended well into the world of buy-outs and private equity. As the buy-out firms have moved up-market into mega- and club-deals, the opportunity to participate in healthcare growth equity opportunities in the middle market has been vacated. With our domain expertise, MPM is well suited to play an important role in this kind of investment. Given our network, our relationship to big pharma, and our capital base, we can become actively involved in reshaping a company and positioning a new entity for commercial success. We’ve already done this with Xanodyne, and we expect to accomplish similar objectives in our work with SkyePharma’s recently announced spinout.”
John Vander Vort, COO and General Partner
“Many of the innovations that MPM started making five years ago have become industry standards in healthcare venture investing. When MPM raised its $600 million fund back in 2000, it was among the first to recognize that its investment in a portfolio company must capitalize the company to move past real value inflection points. For both the clinical and commercial companies, this allowed management to focus on building the company vs. fund-raising – a clear departure from what had been precedent in the life sciences. As a result, several of MPM’s investments were able to produce stellar data and attract the attention of big pharma, and in turn, positioned MPM as a preferred partner to pharma and big biotech – a firm that knew a good idea when it saw one and demonstrated its ability to actively shape its companies into valuable commercial entities, and thereby attractive acquisition candidates.”