The European biotech VC sector is set to get a €200 million ($223 million) injection of capital. Well-established VC shop Vesalius Biocapital is looking to build on the success of its Ogeda exit with a €150 million fund, while new entrant AurorA-TT is putting together a €50 million pot to bankroll technology transfers in Italy.
Vesalius is further along than AurorA-TT. The Luxembourg-based VC shop has already secured commitments worth €65 million for its third European life sciences investment fund. Vesalius' first two funds topped out just upward of that figure at €76 million and €78 million. But, buoyed by its recent successes, Vesalius has bigger plans for its third fund. The ultimate goal is to raise €150 million, as much as Vesalius pulled in for the first two funds combined.
The dialled up fundraising plan reflects the track record Vesalius has established since introducing its first fund in 2007—Astellas’ €800 million takeover of Ogeda is its most recent success—and the shift in focus to later-stage companies for its latest venture. Whereas the second fund set out to invested in a balanced mix of early and later-stage companies, Vesalius new initiative is aimed squarely at businesses that are closer to market. That means Vesalius will need to put up larger sums of money to get a seat at the table.
Those dynamics are evident in Vesalius’ prediction of the composition of the portfolio. Vesalius plans to invest in 10 to 15 companies. The first two funds, despite being half the target size of the third pot, each invested in 11 companies.
In shifting its focus, Vesalius has also tweaked its pitch to potential portfolio companies. Vesalius will invest most of the fund in European companies but it has also set up an office in Boston, Massachusetts, in part so it can offer additional support to biotechs seeking the bigger bucks that can be found in the U.S.
“We want to provide a bridge to enable European companies to access U.S. capital markets, and for North American companies to have access to Europe for development, expansion or access to innovation,” Christian Schneider, Ph.D., managing partner at Vesalius Biocapital III, said in a statement.
AurorA-TT, the other European investor with news out today, has a much more local, early-stage focus. The recently-founded organization is seeking to piggyback on recent development in Italy to create a €50 million technology transfer fund.
“In Italy, there is a brand new €200 million fund of funds named ITAtech, a collaboration between the Italian sovereign fund, Cassa Depositi e Prestiti and the European Investment Fund,” Pierluigi Paracchi, one of five cofounders of the fund, said. “AurorA-TT aims to bank the money from ITAtech to create the first bio technology transfer fund in Italy.”
Paracchi is best known as CEO of Genenta Science, a gene therapy startup that through its €11 million Series A and a collaboration with Amgen has established itself as a rare example of an emerging Italian biotech with an international profile. If successful, AurorA-TT will help more projects at academic centers such as the well-regarded San Raffaele-Telethon Institute blossom into biotechs.
The other four co-founders of the fund are Guido Guidi, M.D., Edoardo Negroni, Gian Paolo Rizzardi, M.D. and Gian Paolo Rizzardi, M.D. Between them, the founders have held leadership roles at companies including Novartis, Italian biotech veteran MolMed and Anglo-Italian biotech accelerator Inorgen.