Canaan Partners

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Canaan Partners

Dollars: $59.86 million
Deals: 21
Based: Westport, CT with offices in Israel, India and Menlo Park, CA
Website: canaan.com
Founded: 1987

Canaan Partners, a multibillion-dollar global venture capital firm founded in 1987, focuses on investments in early stage companies in the technology and healthcare sectors. In the past, it has backed biotechs like Theraclone, a 2011 Fierce 15 company, and the startup Civitas, spun out of Alkermes ($ALKS), as well as Elevation Pharmaceuticals.

Out of Canaan's current $600 million fund, closed in January, 2012, $200 million is dedicated to healthcare and life sciences investments. The company has kept up a steady pace of investments--its healthcare and life sciences portfolio has grown from 13 companies in 2008 to 21 in 2012--and the firm averages three to four new investments per year. In 2012, Canaan made 6 new deals in the healthcare and life sciences space. General partner Brent Ahrens told FierceBiotech he expects to keep up the same pace in deals throughout 2013.

Brent Ahrens

"We like to target opportunities that we can see having pretty good ownership in later on down the line," Ahrens said.

Last year, Ahrens said the firm had a keen eye on medical device companies and biotechs developing antibodies.

In the Q3 last year, Canaan closed a deal with Doylestown, PA-based Novira Therapeutics, whose novel antiviral hepatitis B and HIV therapeutics that interfere with with capsids--a viral protein involved in replication and transmission--made the company an attractive investment for Canaan.

In the fourth quarter, Canaan made deals with Labrys Biologics and Minimally Invasive Devices. Founded in 2012, Labrys is a development-stage biotechnology company focused on treatments for chronic migraine. Labrys acquired its lead antibody candidate, RN-307, for the treatment of migraines from Pfizer ($PFE) and expects to begin Phase II clinical trials on the drug this year.

Ahrens' own interest in and comfort level with medical device products led him to close a deal with Columbus, OH-based Minimally Invasive Devices (MID), which developed and manufactures the FDA-approved FloShield laparoscopic vision system--the first device of its kind that prevents vision loss during laparoscopic surgery due to obscuration of the optics. Canaan's interest in MID represents a reality of the current venture investment market for devices. These days, VC firms are more likely to make investments in a startup or company with a product that has passed development hurdles, rather than one that has yet to prove itself.

This year, Ahrens said Canaan is still interested in biotechs developing antibodies and med device companies, but a bigger part of the firm's strategy will include health IT. Ahrens said Canaan is looking to put about 10% of their healthcare fund into health IT investments.

Overall, Ahrens said there's certainly no shortage of interesting new companies out there.

 "We're delighted with what we see, but because there aren't as many investors as there were a few years ago, it makes it more of a challenge to decide what we want to get involved in," Ahrens said.

For more:
Startup biotech hauls in $23M A round for antiviral work
Canaan Partners adds $200M in venture funds for life sciences

-- Emily Mullin (email | Twitter)