Novartis, NEA join $188M gamble on China biotech fund

BVCF, a Shanghai-based life sciences investor, has closed its third fund with $188 million to back upstart biotechs on both sides of the Pacific focused on the booming Asian market. Dow Jones' VentureWire and other media outlets reported that the backers to this fund include Novartis ($NVS), BlackRock, NEA and International Finance, which is gambling $20 million on the fund at a when time drug development activities in China continue to heat up.

BVCF sits on the crossroads of a relatively small but fast-growing area in biotech. U.S. and European biopharma companies have been looking for new ways to enter the Chinese drug market as the Big Pharma giants build out large new R&D operations in Asia and start linking up with academic groups. And the trend is spawning new joint ventures and company startups with in-licensed development projects.

Last August, BVCF--which used to be called BioVeda China--was the lead investor in a $25 million round for MicuRx, a Bay Area-based biotech working on the parallel development of MRX-I, an oral oxazolidinone antibiotic targeting infections triggered by multidrug-resistant Gram-positive bacteria, in the U.S. and China. MicuRx has facilities in Hayward, CA, and Shanghai.

More recently the fund led a $7.5 million round for RiboQuark Pharmaceutical Technology--a joint venture by Suzhou Ribo Life Science and the RNAi biotech Quark Pharmaceuticals--which is based in Kunshan, Jiangsu Province. The biotech's lead drug now is QPI-1007, an "ocular neuroprotectant" licensed from Quark Pharmaceuticals to sell in China. QPI-1007 was being set up for Phase III studies in nonarteritic anterior ischemic optic neuropathy and a pilot Phase II study in acute angle closure glaucoma.

Investors in the fund include the Mayo Clinic Foundation, International Financial, Obviam, Novartis, BlackRock, Munich Private Equity Partners, Avanz Capital, W.K. Kellogg Foundation, Sweden's Investor AB, family offices Starling Group and Hanking FoF, Bio1, New Enterprise Associates, and Chinese fund-of-funds Magic Stone, according to the Asian Venture Capital Journal.

BVCF's third fund fell shy of its $200 million goal but still easily tops the first two funds of $21 million in 2005 and $90 million in 2008, reports China Money Network.

- here's the story from Dow Jones' VentureWire
- here's the report from Asian Venture Capital Journal (sub. req.)
- here's the story from China Money Network

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