Merck ($MRK) has stepped up its venture investing game. The Canadian unit of the U.S. drug giant is joining forces with Montreal's Lumira Capital to give life to a new venture fund backing biopharma outfits in Quebec. The partners plan to announce the new fund on Monday, The Canadian Press reports.
The fund, which is expected to be dubbed the Merck-Lumira Bioscience Fund, is expected to have "tens of millions" to invest in biopharma deals, according to the report. Merck, whose Canadian unit is headquartered in Montreal, has promised to invest $100 million in R&D collaborations with companies and researchers in Quebec through 2015.
Merck has been among a bevy of Big Pharma outfits to strike partnerships with venture firms recently, eyeing opportunities for the drugmakers to support development of new drugs at capital-hungry startups. For instance, Johnson & Johnson ($JNJ) and GlaxoSmithKline ($GSK) are backing Index Ventures' plans for a $200 million fund that aims to provide investments and guidance for specific products to advance toward the market. GSK's own venture unit, SR One, has been around since the mid-1980s.
Merck, based in Whitehouse Station, NJ, revealed plans last year to pump $250 million into multiple buckets of capital for young life sciences companies. In what appears to be part of its plans with Lumira, Merck told the IN VIVO Blog that it wants to back other venture firms, which would make investments in companies that are developing products of interest to Merck. The long-term goal for Merck would be to license the startups' assets.
Conversely, GSK's SR One and other corporate venture firms have a track record of investing in startups without seeking licenses to the companies' products. That said, drugmakers are hungry for new assets to fill their pipelines, and the big biotech Biogen Idec ($BIIB) has decided only to invest capital in companies as part of deals to license products from those developers. Biogen scrapped its VC unit last year.
- check out The Canadian Press article