Cowen raises $493M fund, further expanding biotech VC pot

Cowen Healthcare Investments has raised a $493 million fund, breezing past its original goal by close to $100 million. The fund closure positions Cowen to continue following an investment strategy that has seen it invest in biotechs such as Akouos, AM-Pharma and Keros Therapeutics in recent months. 

Over the past eight years, Cowen has backed 38 private healthcare companies from its two previous funds. While the funds invest across biopharma, diagnostics and digital health, drug developers have been a significant area of focus for the Cowen investment team led by Kevin Raidy, Tim Anderson and Robert Sine.

Cowen often participates in series B rounds. It is at that point in the fundraising process that Cowen got involved with companies including gene therapy startup Akouos, synthetic lethality player Repare Therapeutics and Semma Therapeutics, the stem cell therapy biotech Vertex bought for close to $1 billion last year.

The funds have also made investments earlier and later in the financing timeline, backing Compass Therapeutics as it exited stealth and picking up a stake in Keros via a series C shortly before it went public. 

News of the closure of Cowen’s third fund continues a series of announcements investors have put out against the backdrop of the COVID-19 pandemic. Since the start of April, three investment groups—Arch Venture Partners, Flagship Pioneering and Oberland Capital—have disclosed life science funds with upward of $1 billion to invest. In the middle of those disclosures, venBio Partners put out word of its $400 million fund.

Cowen, like other funds such as Arch, began raising the money well before the coronavirus crisis hit, with a Securities and Exchange Commission (SEC) filing showing it had raised $332 million as of September 2019. When Cowen put together its second healthcare fund in 2017, it told the SEC it had raised $108 million and was continuing to add capital. That time, Cowen never put out a press release about the final close. 

In disclosing the closure of the third fund, Managing Partner Kevin Raidy said Cowen is “extremely optimistic about the prospects of this industry to address urgent, unmet medical needs,” adding that “investing in premier life sciences companies could not be more critical than it is today.”