GlaxoSmithKline commits venture cash to new $250M biotech startup fund

GlaxoSmithKline ($GSK) is headed west. The drug giant revealed at the J.P. Morgan confab in San Francisco that it has put up $50 million of a $250 million life sciences fund that has been put together by San Mateo, CA-based Sanderling Ventures, which a spokesperson says will help fill a geographic gap in their strategy to seed new biotech startups.

Glaxo's Melinda Stubbee tells FierceBiotech that the fund will be a player in the western U.S., with GSK matching its earlier investments in Index Ventures, which is backing startups in Europe, the U.S, and Israel, and an innovation fund for Canada. This new fund is dubbed Sanderling 7, she adds. "They have" the money, she says, "but I can't say who" put up the rest.

Sanderling has backed about 90 upstarts since it opened its doors in 1979. Its portfolio includes big names such as Dendreon ($DNDN) and Regeneron ($REGN). Endocyte and Pacira went public, and Taligen was acquired by Alexion ($ALXN) for $111 million. GSK, meanwhile, has been acutely aware of the tough financing environment for biotech startups, which produce the kind of new ideas and technologies that the giants benefit from as well.

But Sanderling has kept a decidedly low profile in recent years. Its last fund--which raised $421 million--came together way back in 2004, a different era for the biotech industry. Funds traditionally look to put together new funds after about four years, so GSK's substantial backing must have come as a godsend for the rainmakers at the firm.    

Sanderling has specialized in launching startups, with about half of its cash reserved for drug developers and the other half going to medical devices and information technology. 

"We believe strongly that if you build a company, that's where the real significant return on investment comes," Sanderling's Robert McNeil told FierceBiotech several years ago. "Short term investing is not the best way to do things. We're in company-building mode."

Special Report: Top Venture Capital Firms - Sanderling Ventures

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