Foresite Capital Launches New Venture Capital Fund Worth $668 Million

Venture Capital

Venture capital firm Foresite Capital, located in San Francisco, is launching a new fund, its fourth and largest, worth $668 million.

Fund IV’s limited partners include new investors in addition to existing investors, including university endowments, pension funds, insurance companies and foundations. The company is led by founder and chief executive officer Jim Tananbaum. Prior to founding Foresite, Tananbaum founded GelTex Pharmaceuticals and Theravance. Overall, the company has $2 billion in assets under management.

Foresite Capital’s managing director, who recently joined the company’s management team, is Vikram Bajaj, who prior to joining Foresite was the chief scientific officer of GRAIL, a life sciences company. Before that he was co-founder and former chief scientific officer of Verily Life Sciences, a Google/Alphabet company, and served as Verily’s Scientific Advisory Board chairman.

“At Foresite Capital we’ve brought together a unique value proposition for our portfolio companies,” Tananbaum said in a statement. “We not only provide capital, but also a multidisciplinary team of scientists, clinicians, analysts and engineers who collaborate to seek the best data-driven decisions. The ability to ingest and derive meaning from massive amounts of complex information is a critical success factor in healthcare investing. We’re pleased by the confidence and enthusiasm our Fund IV investors have demonstrated in the Foresite Capital team, as well as the progress made by our rapidly developing portfolio.”

Foresite is particularly interested in investing all areas of healthcare including therapeutics, devices, diagnostics, and services, with a special interest in companies using data science and machine learning applied to biological data. On the company’s website, it says, “We focus on the development and commercialization of transformative products that address what we believe are the most critical, unmet healthcare needs. Our unique structure allows us to develop complete financing solutions in both private and public markets, and every one of our investments gets attention from each member of our investment team.”

Previous investments in the biopharma space include 10X Genomics, Intarcia Therapeutics, Aerie Pharmaceuticals, Achaogen, Aclaris Therapeutics, Adaptimmune and Akari Therapeutics.

On May 2, Foresite was one of a syndicate of investors in insitro, a company founded by former Calico artificial intelligence (AI) expert Daphne Koller. Insitro’s goal is to use machine learning, AI and big data can be applied to drug discovery to speed up the process and cut costs.

In early April, one of Foresite’s portfolio companies, AveXis, was acquired by Novartis in a deal worth about $8.7 billion. That is a 72 percent premium on Avexis’ 30-day volume-weighted average stock price. The deal is largely built on AveXis’ drug, AVXS-101, for spinal muscular atrophy (SMA), a rare disease that affects very young children.

In a conference call to reporters, Vas Narasimhan, chief executive officer of Novartis, said, “We believe the medicine would have a multi-billion-dollar peak sales potential.”

Of the new Foresite fund, managing director Dorothy Margolskee said in a statement, “We are focused on meaningfully improving patient health and well-being. We are privileged to work with creative healthcare and life sciences entrepreneurs, whose efforts continue to advance our understanding of disease and provide innovative approaches to address patient needs.”

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