Scale Venture Partners' portfolio of life sciences companies can claim five regulatory approvals in the past three years, with two more pending a final decision. But that's not good enough to warrant future bets on the industry. Fortune reports this morning that Scale is bowing out of healthcare, with two senior partners sticking around only to support the existing lineup.
The retreat from the therapeutics field is simple, say principals with the fund. It takes too much time and money to win an FDA approval, and the numbers just no longer work. So now Lou Brock and Mark Brooks will remain focused on their existing investments, with added money available for follow-on rounds.
"Our portfolio has had seven NDA submissions since 2008, with five approved and two still pending," Scale's Kate Mitchell tells Fortune. "That should be a success, except it has taken twice as long to get there as it used to five or six years ago. The math with the FDA just doesn't work anymore for us in terms of a venture fund lifecycle ... It's incredibly frustrating to watch this happen, particularly to people like Mark and Lou who have really good investing acumen."
That sentiment is likely to resonate with the rest of the venture crowd involved in biotech. As third quarter investment numbers softened, several pinned the blame on the FDA. Scale's current portfolio is rather small, including Alimera ($ALIM), Ascenta and Sonexa.
- here's the story from Fortune
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