Bain Capital’s time in life science investing has been defined by big numbers: $720 million for its first fund, $1.1 billion for the second fund, $350 million for a single bet on Pfizer’s neuroscience pipeline. Now, Bain has made those numbers look small by reeling in a reported $1.9 billion for its third fund.
The Boston Globe report comes weeks after Bain filed the regulatory paperwork to raise an indefinite sum for its third life sciences fund. According to the report, Bain has tapped its current and former partners for $300 million and persuaded outside investors to part with a further $1.6 billion, setting it up to place another round of bets on companies that need sizable sums to advance.
Bain is reportedly interested in backing companies that need money to wrap up clinical trials or grow their geographic footprint as well as public businesses it perceives to be undervalued. The plan is to make investments of $25 million to $100 million over the next four years.
The playbook is in line with the strategy Bain has followed since setting up its first fund in 2016. Bain identified a gap in the market for a particularly deep-pocketed biotech investor capable of backing pre-IPO crossover rounds, helping more advanced businesses build out commercial infrastructure and giving Big Pharma companies a way to advance assets without committing internal resources.
Bain showed what it could do in 2018 when its private equity and life science groups came together to commit $350 million to a startup, Cerevel Therapeutics, created to advance Pfizer’s pipeline of investigational neuroscience drug candidates. Cerevel is now a publicly traded biotech with a market cap of $3.5 billion and a series of clinical trial readouts on the horizon.
The new fund is 73% larger than its predecessor and 164% bigger than Bain’s first life science fund, positioning the investor to make more mammoth bets on drug developers. Adam Koppel, M.D., Ph.D., managing director at Bain Capital Life Sciences, sees plenty of opportunities to invest the cash.
“It’s a great time to be investing in life sciences,” Koppel told the Globe. “We’re still in the early to mid innings of a great wave of innovations in life science."