4th time's the charm: Longitude Capital raises $585M in its largest-ever fund

Marc Galletti and Patrick Enright like to invest in what they call “transformative healthcare companies.”

The co-founders and co-managing directors of Longitude Capital, a venture capital firm based in the Bay Area, Boston and Greenwich, Connecticut, invest in areas they hope will increase life expectancy and quality of life for patients: oncology, neurodegenerative and aging treatments and the orphan drug market in the biotechnology space; cardiovascular, ophthalmologic and aging technologies in the medical technology space; and “novel models of care and technology-enabled services specifically at the intersection of tech and healthcare” in the health solutions space.

“We are a venture capital firm committed to transforming healthcare by collaborating with entrepreneurs and companies seeking to do three primary things: improve clinical outcomes, enhance patient quality of life and increase the efficiency of healthcare delivery,” Galletti said of their strategy.

That strategy has worked for them so far. Wednesday, the firm announced the closing of Longitude Venture Partners IV (LVP4), with $585 million in capital commitments, the largest since the company’s founding in 2006 and a 10% monetary increase over its previous fund, which totaled $525 million.

The firm’s key differentiators rest on four pillars, Galletti explained: an “opportunistic investment strategy” that allows it the flexibility to invest across companies’ life cycles; its track record of investing in special situations such as spinouts, recapitalizations and certain public companies; its team; and its well-resourced internal research efforts.

Galletti credited those efforts to the company’s team of research fellows with backgrounds in lab work and entrepreneurship, who analyze areas for potential growth and future investments, typically completing six to 12 projects per year. This effort, according to Galletti, makes "a difference in depth and thoughtfulness.”

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Although Longitude Capital invests in companies across stages of development, from newcomers to publicly traded companies, its bread and butter is investment in companies in the proof-of-concept phase, with the goal of helping expand them from there. “The core activity is privately held companies that need the capital, and professional experience that we bring as company builders,” Enright said.

Companies Longitude has invested in include pioneers like Jazz Pharmaceuticals, which developed the first approved narcolepsy treatment, and Corcept Therapeutics, which won the first-ever green light for a Cushing’s syndrome therapy. Other investments include Aimmune, which brought the first drug for peanut allergies to market and was purchased by Nestlé Health Sciences this year, and KaNDy Therapeutics, a U.K.-based company focusing on menopause treatment that was acquired by Bayer Pharmaceuticals, also this year.

The pandemic hasn’t slowed Longitude down. In fact, it’s having “one of the most productive years we've ever had so far,” Enright said, with “four IPOs and three companies that exited via trade sales.”

The pandemic also spurred Longitude to work with its companies to create COVID-19 contingency plans and project the impact of the pandemic on product development and marketing efforts.

“For most companies, clinical trials slowed down. For most companies that were commercial and who relied on face-to-face sales and marketing activities, revenues were impacted. So the first plan of action was to make sure that our companies had adequate resources to sustain a downturn,” Enright said.

Looking ahead, this new fund is slightly more focused on smart, data-collecting implantable devices “that create new solutions and opportunities that we couldn’t have done 10, 15 years ago, and that’s perhaps a bit of an evolution,” Galletti said .

But he emphasized that its core competency remains the same: “looking for solutions that enhance clinical outcomes and quality of life and improves efficiency in health care delivery.”