Lux Capital has nailed down a new fund, its first since 2007, to back startups in healthcare as well as energy and tech. With $245 million in commitments, more than the $200 million it originally targeted, Lux is closing its largest fund to date and staying the course with investments in biopharma. The news comes after ex-Pfizer ($PFE) Chairman and CEO Jeff Kindler, the man who pulled the trigger on the $68 billion merger with Wyeth, joined Lux last year as a venture partner, adding his high-profile name in pharma to the firm's roster.
"Our healthcare strategy will maintain a focus on therapeutics and drug delivery, as well as making new investments in healthcare IT and surgical robotics," said Peter Hébert, managing partner at Lux, in an email to FierceBiotech. "But we remain committed to biotech."
Lux, which has offices in New York and Palo Alto, has a reputation for going in early on investments and taking gambles on science and technology with more promise than proven performance. In biotech, this strategy has led Lux partners to take founding and early leadership roles at startups such as Kala Pharmaceuticals, a Bob Langer vehicle focused on delivery of drugs to the eye, and Genocea Biosciences, which is developing next-generation vaccines against herpes and other diseases.
Lux aims to invest from $100,000 in seed money to $15 million in companies, with plans to target investments in brand new startups as well as more established businesses through corporate spinoffs.
Beat down but not broken, biotech venture investing has been shaky in recent years amid a squeeze on available funds for the venture industry. Too many traditional venture backers of biotech have thrown in the towel on raising new funds. And last year biotech outfits raised $4.1 billion, down from $4.9 billion in 2011 and only marginally better than the $3.9 billion snapped up in 2010, according the National Venture Capital Association and PricewaterhouseCoopers' MoneyTree report, based on Thomson Reuters data.
Depending on how Lux places its future venture bets, we'll see how much the firm can aid cash-starved biotech entrepreneurs. In a phone interview with FierceBiotech, Hébert said that the firm is already in late stages of due diligence for several new biotech investments, but hasn't made any bets on drug startups with the latest fund. Its strategy for the new fund calls for investments in a mix of healthcare sectors, including health IT and medical technology, he said.
- here's the release
Editor's note: This story has been updated with additional comments from Hébert.