Third Rock Venture to Seed Life Science Companies with $770 Million Fund

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Boston-based venture capital firm Third Rock Ventures announced it had closed on a new fund, Fund V, having raised $770 million in oversubscribed funding. As with its other funds, it will focus on discovering, launching and building life science companies.

This is the largest fund in the 12 years Third Rock has been in existence. The company indicates it will use the money to seed 10 to 12 life science companies.

Third Rock has a portfolio of wildly successful companies including Agios Pharmaceuticals, Foundation Medicine and bluebird bio.

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Just this week, bluebird bio announced that the European Medicines Agency (EMA) had approved its Zynteglo gene therapy for patients 12 years and older with transfusion-dependent beta-thalassemia (TDT). TDT is a severe genetic disorder caused by mutations in the beta-globin gene. This results in decreased or missing hemoglobin. Patients with TDT require lifelong chronic blood transfusions to stay alive, which has the risk of progressive multiple organ damage from iron overload. Zynteglo is a one-time gene therapy that appears to cure the disease.

Since being founded in 2007, Third Rock has raised $2.7 billion and invested in more than 50 companies. Its portfolio companies have launched 10 products, including five therapeutics, three diagnostics and two devices.

One aspect of Third Rock that is unique is its willingness to invest in early-stage science, generally viewed as high risk. But its model of focusing on research has been successful, with 19 of their portfolio companies having launched IPOs, many with market values of billions of dollars.

Robert Tepper, one of Third Rock’s founders, indicated to Bloomberg that the firm plans to invest more upfront and retain a larger share. “If we can hold on to those companies as the sole investor or the predominant investor, we think we can get much higher up on the value-creation curve.”

Investors in the new fund included university endowments, family offices and foundations, and the London, UK-based Wellcome Trust. Wellcome Trust has invested in all of Third Rock’s venture funds.

“We appreciate the strong support from new and existing investors,” stated Tepper. “Over the course of 12 years, we have built a leading investor base that is supportive of our unique model. Our approach is hands-on, team oriented, value creation driven, and built for the long term. I am incredibly proud of all that we have achieved to date, and looking forward to what we can accomplish in Fund V and beyond. The team at Third Rock is committed to creating companies with a solid foundation of great science, people, culture, and core values.”

Recent companies launched by Third Rock include Thrive Earlier Detection Corp. On May 30, Thrive raised $110 million in Series A funding. Thrive is launching CancerSEEK, a liquid biopsy test to detect multiple cancers early. The round was led by Third Rock with Section 32, Casdin Capital, Biomatics Capital, BlueCross BlueShield Venture Partners, Invus, Exact Sciences and others.

Thrive came out of the research of Bert Vogelstein, Kenneth Kinzler and Nickolas Papadopoulos at Johns Hopkins University.

At the time, Christoph Lengauer, partner at Third Rock and co-founder and chief innovation officer of Thrive, stated, “Over the past 30 years we have made great strides in understanding cancer. Combining this knowledge with the latest in molecular testing technologies, our founders have developed a simple and affordable blood test for the detection of many cancers at relatively early states. We envision a future where routine preventative care includes a blood test for cancer, just as patients are now routinely tested for early stages of heart disease. We know that if cancer is caught early enough it can often be cured.”

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