Fresh from early successes, RA Capital bags $461M for new fund

RA Capital's Peter Kolchinsky and Josh Resnick (RA Capital)

RA Capital Management has raised another $461 million to invest in private biotechs. The closing of the fund comes 15 months after RA Capital set up an inaugural venture fund that has already seen 25% of its portfolio companies IPO or be acquired. 

RA Capital raised $308 million for its first venture fund in July 2019. Since then, the investment manager has called 80% of its capital and funded 59 companies. Fifteen of the companies have now gone public or been bought. The first fund, Nexus I, invested alongside an evergreen fund RA Capital uses to back public and private companies, enabling it to place bigger bets on biotechs.

The early successes of the first fund have enabled RA Capital to raise a larger successor, Nexus II. RA Capital held the first and final close at $461 million, bringing its total private deal capacity up to $1.3 billion.

Free Webinar

From Patient Adherence to Manufacturing Ease - Why Softgels Make Sense for Rx

Join Thermo Fisher Scientific’s upcoming webinar to learn why softgels offer numerous benefits for Rx drug development, including enhanced bioavailability, patient compliance and easy scale-up. Register Today.

Armed with the funding, RA Capital will continue with the strategy it created for Nexus I. That means Nexus II will invest in “substantially all” of the private companies backed by RA Capital’s evergreen fund. RA Capital established the two-source investment strategy to equip it to take larger positions in “high-conviction investments.” Josh Resnick sees plenty of opportunities for the fund. 

“We continue to see this as an incredibly fruitful time for biomedical innovation,” Resnick, managing partner at RA Capital, said in a statement.

In disclosing the new fund, RA Capital framed the growth of its war chest as a way for private biotechs to access a reliable source of capital during volatile periods in the public markets. That volatility is yet to cause the window for biotech IPOs to slam shut, though, with the industry on track for a bumper year.

RA Capital has been a beneficiary of the willingness of public investors to back biotech IPOs. This year, a clutch of biotechs RA Capital invested in through its Nexus fund have gone public, including Akouos, Nkarta, PMV Pharma and Vaxcyte. RA Capital has continued making new investments, too, backing biotechs including Atea Pharmaceuticals, Nimbus Therapeutics, Silverback Therapeutics and T-knife in recent months while also graduating Aerovate Therapeutics from its incubator. 

Suggested Articles

GE Healthcare has launched a new algorithm that can read X-rays and help assess the correct placement of ventilator tubes in critical patients.

Months after approving a COVID-19 shot based on early data, Russia is reporting data from nearly 19,000 people showing it is more than 90% effective.

Early-stage biotech Elevian has raised $15 million as it looks to target multiple age-related diseases.