Frazier unveils a $262M pure-play biotech venture fund

Frazier's Jamie Topper

After 24 years in the venture investing game, Frazier Healthcare Partners is unveiling a new, $262 million fund that will be the very first that it is devoting exclusively to life sciences companies. And the startup experts say they've never seen a better time to back new biotechs concentrating primarily on new drug development.

The majority of Frazier's money will continue to be earmarked for Series A rounds and company creation, says Managing General Partner Jamie Topper, but ultimately the Frazier Life Sciences VIII team will back everything from seed rounds through later-stage development, pre-IPO funds and sometimes commercialization as well for the companies it chooses to back.

What really gets Topper excited? The chance to back repeat entrepreneurs who've already made money for Menlo Park, CA-based Frazier and promise to harness real innovation in pursuit of an unmet medical need, he replies. Nowhere was that strategy more on display than in the recent $102 million round for Gritstone, which included a new CEO--Andrew Allen--coming from his top science position at Clovis Oncology.

"We remain really, really interested in the next generation of biologics," says Topper, pointing to new takes on antibody development and the power that sequencing is bringing to the R&D table as that technology gets less expensive and more accessible to all drug developers. Topper has personally led Frazier's investments in companies like Alnara, Calistoga and Portola.

Pure play life science venture funds have become increasingly popular in the VC field. Atlas Venture's biotech arm split off from the tech group to go solo, just as Fidelity Bio did more recently with the creation of F-Prime Capital. 

For the short term, at least, Topper says that it's clear that biotech IPOs are out of favor and will likely be a last resort for companies that have to go public in order to raise more funds. A correction on biotech stocks, he adds, probably isn't such a bad thing anyway after three years of go-go growth in the sector.

Perhaps more troubling is the prospect of seeing the current brouhaha over drug pricing become a central issue in the upcoming presidential election, even though most of the rhetoric will likely fade away.

"I do think it's crazy, taking a drug, cornering the market and jacking the price up," says Topper, alluding to the recent controversy that started with Turing's Daraprim price scandal, which quickly bubbled over into trouble for an industry that routinely hikes prices on aging therapeutics.

However that ends, Topper and the Frazier life sciences team remain optimistic about their own niche in the biotech game. Now the goal is to line up investments in 14 to 18 venture-worthy biotechs worth committing anywhere from $10 million to $25 million apiece over the next few years. And Topper is confident that Frazier will do just fine on that score.