Biotechs Salivate as Bay Area VC Firm Banks $419M for Early Life Science R&D
Biotechs looking for potential funding have a new possible source. California venture capital firm Frazier Healthcare Partners announced the closing of a $419 million fund aimed solely at the industry.
The Frazier Life Sciences IX is the second dedicated life sciences fund the company has developed. In 26 years, the company has raised about $3.4 billion in capital. The Frazier team invests primarily in therapeutics-focused companies developing and commercializing innovative biopharmaceuticals that address important unmet medical needs. In its announcement, Frazier said its new Frazier Life Sciences IX fund will use two-thirds of its funding in Seed and Series A rounds. A number of the investments are expected to come from the team’s continued company creation efforts. Portfolio companies such as Calistoga Pharmaceuticals (acquired by Gilead Sciences and Incline Therapeutics (acquired by The Medicines Company) have emerged from the team’s company creation practice.
The company’s previous life sciences fund closed at $262 million.
In total, Frazier has invested in over 170 companies, with investment types ranging from company creation and venture capital to buyouts of profitable lower-middle market companies.
“We are excited to continue to execute the investment strategy that has been successful across numerous funds, including our focus on our robust company creation efforts,” Patrick Heron, managing general partner at Frazier said in a statement.
In an interview with Endpoints News Jamie Topper, a Frazier managing general partner, said there are three trends that are key drives in the company’s investment strategy – regulatory and the potential for new approved drugs; novel meds; game changing drugs that might not come with “sticker shock.”
“It’s our position that the smaller funds tend to do better and I think historically that is true,” Topper told Endpoints News.
Since 2010, there have been 20 approved therapeutics from companies backed by Frazier. That number includes treatments for hematologic cancers such as Gilead’s Zydelig and Silvergate Pharmaceutical’s Xatmep, as well as drug-resistant bacterial infections Merck’s Zerbaxa and The Medicines Company’s Vabomere. Frazier also backed the development of Collegium Pharmaceutical’s pain treatment Xtampza.
Frazier isn’t the only VC firm to make waves with new funds. In October, Illumina Ventures, a spinout from gene-sequencing firm Illumina, Inc., has raised $230 million for its first fund. On its website, the venture firm said its focus includes applications of genomics in life science research, healthcare, agriculture and environmental science, public safety and personal wellness. So far, Illumina Ventures has provided funding to seven companies including Biota Technology, DNA Script, Encoded Genomics, Genome Medical, Kallyope, SerImmune, and Twist Bioscience.