4BIO Capital has raised $50 million (€45 million) to invest in advanced therapy startups. The specialist venture capital player plans to pump the money, plus another $100 million it hopes to add by the final close, into companies that are working to extend use of advanced therapies to major diseases such as diabetes and rheumatoid arthritis.
London-based 4BIO secured the $50 million commitment, including a cornerstone investment from U.S. pediatric hospital Children’s Minnesota, for its second advanced therapy VC fund on the back of successful earlier investments in companies such as Orchard Therapeutics. Now, 4BIO wants to help the advanced therapy sector progress beyond such early successes and demonstrate efficacy in major diseases.
“We’re very focused on bringing advanced therapies out of their historical kindergarten of super-rare diseases ... and monogenic genetic disorders and trying to address larger, more socially important indications where we genuinely have tens of thousands of patients,” 4BIO Managing Partner Dmitry Kuzmin said.
That focus reflects the rapid progress of the cell and gene therapy fields. Kuzmin, who, like many of his colleagues, was an advanced therapy academic before joining 4BIO, has firsthand experience of what he calls the “dark ages” of the field, back when it was a niche area of little interest to many in the biopharma and investment communities.
A string of landmark cell and gene therapy approvals have changed perceptions, enabling 4BIO to swing for major diseases and attract the investment required to bankroll that ambitious strategy.
“The level of interest is fantastic. Institutional investors are now beginning to consider this. When you’re in a room with a major pension fund, the odds are they’ve heard about gene therapy. For LPs, the awareness is growing,” Kuzmin said.
That interest has manifested in commitments of more than $50 million. 4BIO ultimately hopes to have $150 million to invest when it holds the final close of the fund in the second half of next year.
4BIO will invest the money in developers of cell and gene therapies, RNA-based candidates, targeted treatments and the microbiome. One-third of the money will go to companies 4BIO creates itself, primarily by taking research out of academic institutions in the U.K. and other parts of Europe.
“The need for company formation is larger than in the States where the entrepreneurial side of the market is more developed,” Kuzmin said. “There are very strong advanced therapies labs all across the U.K. The quality of science that is going on in U.K. institutions is definitely on par with what we’re seeing in the U.S.” 4BIO has no geographic restrictions on its investment strategy.
While Kuzmin thinks the quality of U.K. science is a match for the U.S., gaps remain in other areas. One of the historical weaknesses of the U.K. biotech scene has been access to capital, but, in the early stage advanced therapy field 4BIO plays in, that problem is mitigated by the willingness of groups such as the Medical Research Council to fund work deep into preclinical.
That leaves the problem of the U.K.’s other long-standing weakness: leadership.
“The key challenge in the U.K. is on the managerial talent side. There are just not enough people for these companies and bringing in talent is always a major challenge,” Kuzmin said.
4BIO wants to help its portfolio companies, both those it founds and the existing early stage startups that receive the other two-thirds of its money, manage the talent challenge and other issues they are likely to face. Those issues included access to CROs, the design of clinical trials and manufacturing, which Kuzmin sees as a key challenge for the field.
“The largest bottleneck for the past three to four years has been manufacturing. It’s very difficult to manufacture at scale and it’s also very difficult to secure batches for clinical trials. We’re trying to help our portfolio companies have a coherent manufacturing strategy from very early on,” Kuzmin said.