Early-stage biotech investor Flagship launches $270M fund

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Flagship Ventures is expected to announce that it has reeled in $270 million for its new life sciences funds, putting it on track to launch a bevy of new biotechs to join its lengthy roster of startups. A key player in the early-stage R&D investment arena, Flagship managing partner and CEO Noubar Afeyan says Fund IV easily broke its $250 million goal.

The money will add around 20 new companies to Flagship's portfolio which will stand to gain anywhere from $10 million to $20 million in support from the venture group, Afeyan tells FierceBiotech at the J.P. Morgan conference in San Francisco. About eight of those companies--which will include a slate of sustainability tech companies in the mix with life sciences--will be founded in the firm's VentureLabs. And there's some money that's going to be earmarked for relatively late-stage efforts, he adds, to take advantage of the constricted financing environment that afflicts the industry.

"It is a tougher environment," says Afeyan. "The investment community that invests in our funds are markedly discouraged or pulling back." That said, Afeyan also notes that Flagship turned away $30 million before it closed the fund. And combined with the $200 million in healthcare cash Canaan unveiled for its new fund on Monday, the industry will end the week with a fresh pot of $470 million to compete for. 

Flagship is well known to many of the biotech industry's highest profile entrepreneurs, particularly the risk-takers in the academic community working on cutting-edge approaches to medicine. The fund has backed three creations from MIT's Robert Langer and Harvard's Omid Farokhza--Selecta Biosciences, Bind Biosciences and the newly launched Blend Therapeutics. It's also done well with startups like Agios Pharmaceuticals ($33 million Series A) and Adnexus Therapeutics (acquired by Bristol-Myers Squibb), with bets on ModeRNA (another Langer company) and more now in the works. All of them share two common traits, says Afeyan: A new approach to a mechanism of action or a platform that can deliver multiple drug products.

There's something else that all 35 companies in the portfolio share, he adds. None of them have done an option deal. And if he has his way, that record will remain unchanged for this new batch of companies coming under his wing.

- here's the Flagship release