Life sciences investor Hatteras Venture Partners has seen some sweeping changes in its native North Carolina over the past year, as anchor tenant GlaxoSmithKline ($GSK) is shedding more than 1,000 local jobs and disrupting the local biotech ecosystem. But all that displaced talent has created a wealth of potential for new startups, Hatteras said, and the firm has put together $90 million for a new fund designed to back the next generation of promising companies.
The latest cash makes for the first close of Hatteras' 5th fund, which the firm hopes to expand to $150 million over the next three quarters, General Partner Clay Thorpe said. Joining Hatteras' group of limited partners are Malin, a newfangled biotech investor founded by some Elan veterans, and the University of North Carolina. The firm has also maintained its LP relationships with GSK, LabCorp ($LH) and Alexandria.
With its new cash, Hatteras is scouting for new investment opportunities both in seed-stage upstarts and more mature companies in life sciences. The firm pays particular attention to innovation happening in its back yard of Research Triangle Park, an area in flux as both GSK and CRO giant Parexel International ($PRXL) lay off clinical researchers. The upside of such changes is a big boost in the local inventory of ideas, Thorpe said, and Hatteras plans to get in on the ground floor of what could be a local boom.
"We're going to figure out a way to take these chicken scraps and turn them into chicken salad," he said. "The talent now available from GSK is tremendous, and it's getting put to work."
Much like its fourth fund, Hatteras V will dedicate about 20% of its investments to seed-stage companies, extending a program the firm calls Hatteras Discovery. With Hatteras IV, the firm committed about $2 million total to seed G1 Therapeutics, Lysosomal Therapeutics and Clearside Biomedical; today, those companies have raised more than $90 million in venture investments, Thorpe said, lending weight to the Hatteras Discovery model.
The remaining 80% will go to already-established companies in biotech, med tech and healthcare technology, including some already in the Hatteras portfolio. The firm is looking to establish longstanding relationships with its beneficiaries, Thorpe said, which helped establish its new relationship with Malin. Launched earlier this year, Malin raised €330 million in an IPO to take long positions in biotech. Among its early bets was Viamet Pharmaceuticals, an RTP-headquartered member of the Hatteras portfolio, and the two investment firms built a relationship from there, Thorpe said.
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