|Abingworth's Tim Haines|
The international team at Abingworth likes investing in co-development programs, backing two companies that specialize in taking on the risk and cost of a pharma or Big Biotech company's Phase III in exchange for a precalculated, multiyear payout that can be earned for success. And today it's unveiling its first standalone fund stocked with $105 million to invest solely in more such pacts.
Abingworth was an early investor in two portfolio companies: San Francisco-based SFJ Pharmaceuticals and Avillion, headquartered in London. But up until now it's been investing out of its current fund, reserving around 25% to 30% of its capital for the ventures.
"This is the first dedicated co-development fund," says Tim Haines, the London-based managing partner of Abingworth, who adds that it's the kind of fund that attracts a different kind of limited partner into the fold; someone who may be drawn to the straightforward prospect of gambling on a specific set of late-stage studies, where Phase II or even related Phase III data can be on hand to assess the risk involved.
A number of these pacts are struck in strict privacy and carried out under the radar, though Pfizer has publicly lined up a few deals of its own. The single highest-profile program was executed for Eisai, who won when SFJ struck paydirt Phase III thyroid cancer data on lenvatinib, paving the way to three key market approvals around the globe last year.
"There's a pretty clear view on the risk," says Haines, "with a high likelihood of success."
Those odds are sweetened by Haines' high opinion of the development groups at SFJ and Avillion. "They both are very talented teams," he says, noting that that's a sentiment that he's heard echoed by drug sponsors.
Of course, a single Phase III can easily run through more than the amount that Abingworth has in its new, dedicated fund. It's not unusual to see trials that can cost $150 million to $200 million, says Haines, whose fund has partnered with Clarus Ventures on the co-development model.
This new fund, though, will help back more deals for the next two or three years, says Haines, giving Abingworth more experience in seeing how it plays out for investors.
"We'll see how it goes," he notes. "We want to figure out the legs it has."
- here's the release