5AM Ventures plots $240M fund as biotech investments crater

Biotech bankroller 5AM Ventures has its sights set on a $240 million fund, putting together its fourth war chest as industry venture deals continue their middling pace.

The San Francisco and Waltham, MA, investor is again raising cash, according to an SEC filing, building from the $159.2 million fund it closed back in 2009. In keeping with 5AM's mission, the latest haul will go toward early-stage life sciences companies, a group that has been starving since the downturn. There have been just 104 first-time biotech investments in the first 9 months of 2013, according to PricewaterhouseCoopers and the National Venture Capital Association, the lowest mark in 17 years.

5AM has about $435 million under management, and its active portfolio includes high-profile innovators like Ambrx, Cleave Biosciences and the soon-to-go-public Relypsa. Among 5AM's successful exits are Pearl Therapeutics, snagged by AstraZeneca ($AZN) for up to $1.15 billion this year, and Marcadia, which Roche ($RHHBY) picked up for as much as $537 million in 2011.

And while the biotech venture market remains tepid, many of the industry's stalwarts don't seem terribly spooked. 5AM isn't the only investor choosing now to reload, joining Frazier Healthcare and the $377 million fund it closed this month and VC giant OrbiMed and the $300 million sum it revealed in August. Biotech venture mainstay Third Rock closed $516 million for its latest fund this year, joining Atlas Venture and its $265 million raise.

- check out 5AM's filing