Squarely focused on seeding and nurturing biotech startups and armed with some of the best relationships in the business, Atlas Venture is unveiling a new $280 million fund today that will double down on its bet on cutting-edge drugs. Atlas relied on two close industry giants--Amgen ($AMGN) and Novartis ($NVS)--and a mix of old and new investors to help raise a fund that easily broke through its $250 million cap.
The new cash injection comes 6 months after the tech and biotech groups decided to split off, leaving Atlas with a close focus on early-stage startups. In recent years the firm has founded a lineup of some of the most closely watched biotechs in the industry. That list includes: Zafgen, Avila (acquired by Celgene), Stromedix (acquired by Biogen), F-star, miRagen, Nimbus, Bicycle and RaNA.
Over the past three years Atlas has been a startup engine, launching 20 biotechs covering a wide range of therapies and diseases. A few days ago it moved into its new office on Kendall Square, ground zero in the world's busiest biotech hub. And a new CFO, Ommer Chohan, has been recruited to keep the VC firm on track with the financials.
Over the next three to four years, Atlas plans to keep up a steady pace of startups, backing four to 6 new companies a year, or up to 25 or so in this next wave to come from Fund X.
Atlas partner Bruce Booth has always been blunt about the need for a simple organization structure and a clear investment strategy. In a blog on the new fund he says Atlas is a "flat and equal five-person partnership, totally focused on a single sector, and are right-sized for driving returns from early-stage biotech investing."
"Much like Fund IX and prior funds," Booth tells FierceBiotech, "half of what we do are drug discovery platform companies, new modality plays, and the other half are more asset centric, lean and virtual. Of those (asset centric companies), roughly half will be build-to-buy structures," of which Atlas has done four to date.
While Flagship, Third Rock and other venture groups that tend to specialize in startups have had no trouble raising their own new funds during the boom, Booth says that there's still plenty of opportunities to find new startups. One reason: Atlas spreads its tentacles into Europe and San Francisco, thinking globally while keeping most of its new portfolio plays close to home in Cambridge/Boston. Also, the lean times after 2008 led to a major shakeup in his field, winnowing out venture groups and leaving a more select crowd to compete in the preclinical and early stages of drug development.
"In the case of a lot of startups," he adds, "we source IP from all over." They also do R&D all over, with Germany's Evotec closely engaged in platform work with Padlock team members in Europe.
Says Booth: "It truly is a global marketplace."
And don't talk to Booth about the biotech boom-or-bubble debate. He's seen booms and busts, riding out the lean years from 2008 to 2012 insisting that the fundamentals were all fine. Atlas' investments are going into technologies that need years to develop. So he and his partners are going to stay focused on the long run, ready to ride out any future downturn that may be on the horizon.
Right now, he has the money to make that argument stick for some years to come.