U.K. Venture Group Abingworth Attracts $375M For New Bioventures Fund
This article was originally published in The Pink Sheet Daily
Executive Summary
The BioVentures VI fund will invest across the life sciences sector in Europe and the U.S. and could herald an uptick in VC fundraising activity.
The U.K.-based international venture capital firm Abingworth has raised £225 million ($375 million) in the final closing of its latest life sciences fund, in a move that suggests investors may be becoming more willing to finance biotech and health care-related start-ups in Europe and the U.S.
It’s the largest VC life sciences fundraising seen in Europe for many months. Other investment groups, including Gilde Healthcare, have raised smaller amounts since the autumn of 2013, while the life sciences specialist Sofinnova Partners raised $312 million back in December 2012.
Several more venture capitalists are believed to have funds in the pipeline in Europe that could close over the next several months, particularly with the gradual improvement in the economic outlook and small sparks of IPO activity in the region’s stock markets. Two U.K companies, allergy therapy developer Circassia Pharmaceuticals PLC and the genomics services firm Horizon Discovery Group PLC, have announced plans to list on the London Stock Exchange and the Alternative Investment Market (AIMS), respectively, over the next few months .
One small French company, Crossject, achieved an IPO on Euronext Paris in mid-February that raised $23 million, the first biotech/medtech offering in Europe for some time (Also see "France’s Crossject Completes Europe’s First Biotech/MedTech IPO In 2014" - Pink Sheet, 18 Feb, 2014.).
Tenth Life Sciences Fund
Abingworth BioVentures VI is the tenth life sciences fund set up by Abingworth, which also has offices in Menlo Park, Calif., and Boston. The VC says it intends to invest across geographies in Europe and the U.S. It also will invest across stages of development and financing type, including early- and late-stage private deals, VIPEs (venture investments in public equities), venture growth and public equities.
A smaller amount than for previous funds – £200 million – initially was targeted due to the tougher current financial environment. “We had seen other companies taking a long time to raise capital, and raising smaller funds, and even not managing to raise funds at all, so we decided to be realistic,” said Abingworth’s Managing Partner Stephen Bunting.
Ultimately, 80% of the funding was raised relatively quickly, and the last of the financing became available at the start of 2014, Bunting added.
Overall, investors appeared to be taking longer and exercising greater care over where and in whom they invested. “Not as many people appear interested in the life sciences space as previously, but those that are interested have a greater appreciation of the sector and are willing to invest. The process just takes longer,” Bunting said in an interview.
Abingworth intends to make investments of between £5 million and £20 million spread across 15-20 opportunities, and already has made four deals: in the ophthalmic gene therapy company GenSight Biologics SA (Also see "With Precedents In Place, GenSight Eyes Gene Therapies For Orphan Disorders" - Pink Sheet, 8 Apr, 2013.); the late-stage U.K. drug-development firm Avillion LLP ; U.S.-based eFFECTOR Therapeutics Inc. which is developing novel targets for therapeutics, mainly in cancer; and the U.S. firm Avedro Inc., which is developing new technology to reduce corneal cross-linking in ophthalmic indications.
Other Recent Funds Raised In Europe
Other life sciences funds closing in Europe recently include the $200 million Gilde Healthcare III capital growth fund, which closed in November. The Utrecht, the Netherlands, and Cambridge, Mass.-based firm said it would invest in digital health, medical devices, diagnostics and therapeutics in the U.S and Europe.
In January, Paris-based VC Seventure Partners raised €120 million ($166 million) for its “Health for Capital” Innovation Fund that will invest in biotech, medtech and diagnostic companies, mainly in Europe but also in North America and Asia.
One has to go back to December 2012 to find a fund closing of comparable size to Abingworth’s. Sofinnova Partners raised $312 million for Sofinnova Capital VII at that time, with the proceeds focused on entrepreneurs developing disruptive technologies in the biopharmaceutical, medical devices and industrial biotechnology fields. Two-thirds of its investments were targeted for Europe and one-third elsewhere, most likely the U.S.