Omega's New Fund Has $650 Million to Invest in Life Science Companies
Boston-based Omega Funds, an international healthcare venture capital firm, closed on its seventh and largest fund. The oversubscribed fund, Omega Fund VII, raised $650 million, which it plans to invest in life science companies in the U.S. and Europe. Since it was founded in 2004, Omega Funds has raised almost $2 billion to invest in biopharma entrepreneurs.
“We appreciate the trust from both our longstanding and new investors and their support of our differentiated model, which leverages our broad investment toolkit and data-driven approach to target transformative innovation,” said Otello Stampacchia, founder and managing director of Omega.
“We look forward to contributing our conviction-building processes and network connectivity, in addition to capital, to the many entrepreneurs and founders intent on transforming existing standards of care for severe diseases. We believe this is the most exciting time to invest in healthcare, due to the accelerating pace of development in biotechnology and the fact that the COVID-19 pandemic has led to many novel discoveries about the human immune system.”
So far, Omega-funded companies have included 39 successful initial public offerings (IPO) and 35 exits via mergers and acquisition; 46 have brought new products to market. Recent IPOs and exits include Theseus Pharmaceuticals, Adagio Therapeutics, Icosavax, Imago Biosciences, Ikena Oncology, Nuvation Bio, Sana Biotechnology, Prevail Therapeutics, which was acquired by Eli Lilly, and Kronos Bio.
Theseus went public in October 2021 and raised about $160 million. Adagio went public in August 2021 and raised about $355.8 million. Adagio has been on a roller-coaster since the IPO. The company has an antibody-based drug, ADG20, which a recent study said would not work against the Omicron variant of COVID-19, followed a few days later by a study saying it worked well against Omicron.
Icosavax launched its IPO in July 2021, raising about $182 million and Imago went public in July to raise $134.4 million. Ikena’s IPO was in March 2021, worth $125 million.
In February, Nuvation closed on its business combination with Panacea Acquisition Corp., a special purpose acquisition company (SPAC) sponsored by EcoR1. It then began trading on the NYSE. In the same month, Sana debuted on the U.S. stock market, raising a stunning $587.5 million, giving it a market capitalization of $6.38 billion, the largest-ever IPO for a preclinical biotech company.
In January 2021, Eli Lilly completed its acquisition of Prevail Therapeutics for about $1.04 billion. Prevail is focused on gene therapies for neurodegenerative diseases.
Kronos announced its IPO in October 2020, raising $250 million.
With the closing of the fund, Omega also announced Mike Powell was coming on as Executive Partner, and Francesco Draetta was being promoted to Partner. Powell joined Omega in August 2021 from Sofinnova Investments, where he had been Managing General Partner since 1997. Draetta began his career at Omega as an Analyst from 2008 to 2012, then rejoined in 2016 as a Principal.
Stampacchia added, “We have thoughtfully built our investment team to have the diverse capabilities required to successfully identify, support and construct biotech companies that can bring novel therapies to patients. We look forward to Francesco’s continued contribution and Mike’s complimentary additions to the team.”