Domain Associates has begun tapping its extensive biopharma network in search of products that could have a bright future in the Chinese market. The venture capital firm has partnered with a group of pharma consultants to create a new enterprise--Domain Elite--dedicated to launching a portfolio of biopharma start-ups in China which will in-license drug, diagnostic and device technology for the Chinese market.
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| Brian Halak, Domain Associates partner |
The structure of the deal is simple. Domain already has a number of companies in its biotech portfolio. The venture partners can identify products and fund new companies, with Elite stepping in to recruit managers and staff as they forge in-licensing deals and bring over experimental as well as approved drugs, diagnostics and devices, gain regulatory approvals and begin marketing efforts. And as with all Domain investments, exits can be crafted through buyouts and public offerings.
"We have a long history of starting companies," Domain partner Brian Halak tells FierceBiotech. "We have a network we can draw on to find interesting assets and bring capital to the table. (The staffers at) Elite Consulting know the Chinese market extremely well." And that's important, he adds, "as not all interesting U.S. products will work in China."
Halak and Micah Zimmerman, a partner at Elite Consulting, which was established back in 1997, say the plan now is to set up a handful of these new companies, perhaps four, in the next 4 years. And they are already in "4 or 5 in-depth talks."
"We don't have any strict criteria," says Halak. "We need to get a certain amount of money to work, driven by opportunity. We will have enough money reserved with ourselves and potential partners to carry things through into the market. What we invest will depend on the opportunity." And while there's no specific dollar figure in mind, he adds. Domain's piece "could be up to $20 or $30 million."
Halak added that Domain will start with seeding new companies and then look to bring other venture groups to the table to create new syndicates to back new ventures.
Domain, one of the most active biotech investors in the U.S. venture community, has a history of striking unconventional partnerships in search of new opportunities. The venture group recently joined hands with a big Russian investor, steering them to new U.S. biotech investments.
- here's the press release