J&J, Novartis help Medicxi raise €400M biopharma fund

Medicxi partner and co-founder Francesco De Rubertis (Medicxi)

Medicxi has raised a €400 million ($448 million) biopharma investment fund. Johnson & Johnson and Novartis pumped money into the fund as cornerstone strategic investors, helping Medicxi wrap up fundraising in record time.

In the past, Medicxi has taken several months to raise its funds, according to partner and co-founder Francesco De Rubertis. This time around, Medicxi was able to complete the process within six weeks.

"It was much faster than usual,” De Rubertis said. "I think there are two reasons why. One is the environment is much better than a few years ago. European venture is clearly an asset class of interest because there have been good returns. But secondly I would like to think the track record that we have enjoyed over the last several funds must have been a push factor that sped things up."

European VC shop Medicxi broke off from Index Ventures in 2016 with €210 million from backers including J&J to invest in early-stage, asset-centric companies. The next year, Medicxi branched out into later-stage financing by getting Novartis, Verily and others to back a $300 million growth fund. 

Now, Medicxi has returned to the well once again. The third fund is bigger than its predecessors, both in terms of the amount of money it has to invest and the breadth of its focus. Whereas Medicxi previously raised distinct funds for early and late-stage investments, its third, €400 million vehicle will span from discovery programs through to late-phase clinical assets.

"It's logistically easier,” De Rubertis said. “Our investors wanted to invest in everything, so we created one joint fund for both early and late-stage investments."

Medicxi will continue to follow the asset-centric investment model it is synonymous with. But it will also back fully integrated private companies with a pipeline of assets or a platform with the potential to generate one, as it did with the growth fund it raised in 2017. Medicxi branched out, as later-stage companies tend not to be single-asset operations, but it remains committed to its founding concept. 

"Asset-centric is our main strategy but we are allowed to do platforms or pipelines when we think it's really the right thing to do, which is the minority of the time,” De Rubertis said. When Medicxi backs a pipeline or platform company, it wants most of the budget to go toward one molecule it believes in. 

That asset-centric approach influences the type of projects Medicxi backs. Having raised more than $1 billion, Medicxi is established in the top-tier of European VC funds and theoretically equipped to participate in the triple-digit rounds raised by biotechs with big pipelines and overheads to match. 

Yet, as De Rubertis sees it, Medicxi has used its growing financial resources to serve a different part of the biotech ecosystem. 

"With this cash we have established an operational platform ... for the drug hunters and the maverick scientists ... who have an out-of-the-box idea but don't know how to move forward in the drug development space,” De Rubertis said. “It’s really about the drug hunters, not companies with lots of infrastructure and nice and shiny big offices.” 

J&J and Novartis were the main strategic investors in the fund. Medicxi also secured money from all of the institutional limited partners that backed its other funds and brought on board new investors including longstanding hospital foundations and medical institutions.