San Francisco biotech bankroller Foresite Capital has closed a $300 million second fund, setting out to invest in drugmakers with a clear path to market amid some renewed optimism in life sciences venture capital.
The latest oversubscribed fund comes on the heels of Foresite's inaugural $100 million raise, which wrapped up last year, and the firm said it plans to diversify its biotech bets with a few wagers in diagnostics, genomics and healthcare services.
Foresite's portfolio is largely focused on publicly traded, late-stage drug developers either working through Phase III trials or gearing up for regulatory review, including Puma Biotechnology ($PBYI), Keryx Biopharmaceuticals ($KERX), BioDelivery Sciences ($BDSI) and Orexigen ($OREX).
Foresite's latest move, a $57 million contribution to Intarcia Therapeutics' $200 million round, is designed to help get a promising diabetes treatment through Phase III testing, and the firm is on the hunt for more investments with similar near-term potential, founder and CEO Jim Tananbaum said.
"Since founding Foresite Capital in 2011, we have seen several portfolio companies grow into billion-dollar-plus businesses," Tananbaum said in a statement, and the firm is dedicating its latest fund to healthcare outfits it believes can do the same.
But the firm won't shy away from bets on nascent companies when the science is right, Managing Director Christine Aylward said. Foresite has backed the early-stage Karyopharm Therapeutics ($KPTI) and Epizyme ($EPZM), along with mid-phase outfits like Xencor ($XNCR) and Acceleron Pharma ($XLRN), all companies united by the presence of promising products and reliable personnel, she said.
"We don't get into situations we're trying to fix," Aylward told FierceBiotech. "We get into situations where we have extreme confidence in the management team."
Aylward's firm joins a growing list of life sciences investors unveiling new funds over the last 12 months. In February, the U.K.'s Abingworth closed a $375 million raise, while early-stage backer 5AM Ventures revealed a $250 million second close in December, and VC giant OrbiMed launched a $735 million fund the month prior. VC mainstays Frazier Healthcare, NovaQuest, Third Rock and Atlas also unveiled funds in 2013, totaling more than $1 billion.
"We think there's never been a better time to have our investment focus," Aylward said. "Now we're just focused on finding the best companies we can."
Before cutting the ribbon on Foresite, Tananbaum founded Geltex Pharmaceuticals, which Genzyme acquired for $1.6 billion in 2000, and then helped launch Theravance ($THRX), also serving as CEO of the biotech success story.
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