Fresh from floating plans to raise up to $364 million in an IPO for his life sciences fund, ex-Elan ($ELN) chief Kelly Martin is going into the biopharma business with his former chief medical officer, Menghis Bairu. Martin announced today that he's sinking up to $43 million into Bairu's newborn Serenus Biotherapeutics with plans to gain a majority interest in the company.
Martin's Malin Corporation is investing $18 million now for a 41% stake in San Francisco-based Serenus, with another $25 million on hold as they look to base the company in the low-tax haven of Ireland, where Martin operated Elan. Martin is taking the chairman's post in the deal, with ex-Elan general counsel John Given taking a director's seat.
Bairu launched Serenus last summer with an unconventional biotech business plan. He plans to in-license drugs already approved in either the U.S. and Europe and then coordinate a late-stage development strategy for gaining approvals in sub-Saharan Africa. Where most Big Pharmas may see a thin market with low margins and a large population of the people too poor to pay for branded meds, Bairu sees a burgeoning biopharma market for a growing middle class. And that's a niche he believes can pay off.
Evidently Martin, best known for his dealmaking with the likes of J&J ($JNJ) and Pfizer ($PFE) and a controversial figure in the investment community, sees some opportunities as well.
"This transaction not only provides us with capital to accelerate the realization of our vision for the company, but also with talent and insight from accomplished global biopharmaceutical veterans and access to novel products through their extensive industry relationships to help us build a company with a lasting impact on the health of people in Africa," says Bairu in a statement.
As CEO for Elan, Martin proved to be a lightning rod for activist investors and analysts, frequently angered by his use of private jets and repeated R&D setbacks. A last-ditch attempt to use a windfall from Biogen Idec to fund a deal spree was ultimately rejected by shareholders, who opted for a buyout offer. He reportedly made up to $40 million from the Perrigo acquisition, an early tax inversion deal.
Since then he's become an active biotech investor, working closely with the U.K.'s Neil Woodford and others to invest in companies like Viamet.
- here's the release