Novartis backing sets Seventure up to place 25 bets on microbiome plays

Novartis ($NVS) has signed up as the strategic pharma investor in Seventure Partners' microbiome fund, blasting the VC shop past its initial fundraising target in the process. With €160 million ($176 million) to play with, Seventure now plans to back 25 microbiome companies, most of which will be based in Europe.

Isabelle de Cremoux

Paris, France-based VC shop Seventure held the first close of the fund two years ago, at which time it had €62 million to its name, partnerships with food and med-tech companies and an ambition to bring a Big Pharma player on board to help it toward its €120 million fundraising target. Seventure set up the fund to build a portfolio of companies from across three industries it sees the microbiome reshaping: Biopharma, connected health including diagnostics and food and nutrition. Now, with €160 million in the bank, it is ready to back 25 companies split evenly across these three fields.

Seventure's ability to raise 33% more than it initially targeted is a reflection of the fast advance of microbiome research in recent years. "When we started to invest in the field from 2008 to 2012, when we spoke about the words microbiome, microbiota or gut flora, very few people understood what we were talking about," Seventure CEO Isabelle de Cremoux told FierceBiotech. Now, the likes of Johnson & Johnson ($JNJ) are collaborating with microbiome players. And the concept, while still somewhat experimental and unproven in terms of drug development, has gone mainstream.

De Cremoux has always wanted to bring a Big Pharma partner on board to provide cash and participate in talks about scientific, business and regulatory aspects of the microbiome field, but it has taken until the fourth and final closing of the fund to iron out the details. Danone, Tereos, Lesaffre, Bel and Tornier, a mix of food, nutrition and med-tech companies, were already partnered with the Seventure fund by the time Novartis committed. "The cycle of decisions in Big Pharma is a little bit longer," de Cremoux said. Big Pharma is clearly paying attention to the field, though.

Financiers have stepped up their interest in the sector, too, with 2015 seeing Neil Woodford's fund contributing to a £34.8 million investment in 4D Pharma (AIM:DDDD) and Flagship Ventures getting Evelo Therapeutics started with $35 million. Flagship, specifically its portfolio firm and microbiome success story Seres Therapeutics ($MCRB), have played a big role in the rise of investor interest. "After Seres' IPO, the VC community started to wake up and say, 'Oh, maybe there's something in the microbiome field that we better watch'," de Cremoux said.

The uptick in VC interest in the microbiome means more competition for investment opportunities. But having gotten to the field ahead of many of its rivals, and with the scope of microbiome research broadening, de Cremoux thinks Seventure is well placed. The broadening of the scope of research is reflected by the growing number of diseases linked to microbiota. Having started as a gut-focused field, microbiome researchers are now investigating the links between microbiota and cancer and CNS diseases. De Cremoux is tipping the skin microbiome to be the next breakthrough niche.

And, with interest from large companies ratcheting up in lockstep with the potential suggested by basic research, de Cremoux expects the dollar amounts attached to deals to climb soon. "First quarter next year, you will start to see collaborations with significant amounts attached," she said.

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