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CHART: The biggest dedicated life sciences capital raisers

Dedicated life sciences firms with strong AUM growth have been prime targets for larger GPs recently – here's a list of firms ranked by capital raised.

Private equity’s growing interest in drug development has seen some high-profile acquisitions recently, including those of Apollo Global Management’s minority stake purchase of Paris-based Sofinnova Partners, Carlyle Group’s deal with UK firm Abingworth and EQT‘s acquisition of Amsterdam-based Life Sciences Partners.

PEI data shows some $12.7 billion was raised last year for life sciences, more than double the amount raised the previous year as the pandemic created unprecedented demand for medicines and healthcare services.

European life sciences firms are particularly attractive targets for larger private equity firms because of their focus on pharma discovery, according to Victor Quiroga, a founding partner at advisory firm Triago, which advised Sofinnova on its May stake sale to Apollo.

“The industry… [in Europe] has remained very much focused on molecular discovery, pharmaceutical development and therapeutic experimentation, while in the US the industry has been more focused on healthcare as a service,” he told Private Equity International.

In addition, Europe’s distinct geography allows for a concentration of scientific knowledge, academic prowess, pharmaceutical corporate knowledge and PE and VC expertise that is impossible to find elsewhere, the executive added.

In venture capital, life sciences and tech funds were the most attractive sectors for LPs – both tied at 24 percent – according to Probitas Partners’ 2022 Institutional Investors Private Equity Survey. Investors also favoured funds focused on early-stage investing (59 percent) versus late stage (46 percent).

Below is a list of dedicated life sciences-focused private equity firms ranked by capital raising, according to PEI data.

Here are five firms that have been active on the fundraising front in recent years:

Frazier Healthcare Partners

Frazier Healthcare Partners is a private equity and venture capital firm with dedicated life sciences and growth buyouts teams. Its unit, Frazier Life Sciences, held the final close in March on its 11th fund on more than $987 million, exceeding its $800 million target. The team’s investment strategy is to advance innovative therapeutics through company creation, early-stage venture (Series A and Series B), and crossover and public investing. In October it raised nearly $830 million for its public life sciences fund.

Lilly Asia Ventures

Lilly Asia Ventures, backer of genome editing company EdiGene and Legend Biotech, held a one-and-done on its sixth US-denominated life sciences fund last year on $450 million. US pensions Los Angeles County Employees’ Retirement Association, the California State Teachers’ Retirement System and San Francisco Employees’ Retirement System have committed capital to the vehicle, PEI data shows. The firm has offices in offices in Shanghai, Hong Kong and Palo Alto.

Medicxi

Co-founded by veterans of Index Ventures’ life sciences team, Franceso De Rubertis, Richard Lee and Giovanni Mariggi, Medicxi‘s team has been investing in life sciences for over 20 years across venture, growth equity and structured secondaries deals. The London-headquartered firm has invested in over 100 innovative biopharma companies and achieved more than 30 exits through IPO and M&A, including those sold to GlaxoSmithKline, Amgen and Janssen Pharmaceuticals, according to its website. Medicxi is investing its 2019-vintage, €400 million fund, Medicxi III. Johnson & Johnson Innovation, Novartis and Verily, which is backed by Google parent Alphabet, have invested in Medicxi funds. The firm is also in market with its fourth offering with an undisclosed target and has gathered approximately $350 million in a first close, PEI understands.

Forbion

European life sciences firm Forbion gathered €360 million for its Growth Opportunities Fund I last year, exceeding its original €250 million target. Capital commitments came from Pantheon, Eli Lilly and Company, Horizon Therapeutics, the Belgian Growth Fund and the European Investment Fund, among others. The Amsterdam-based investor has raised €1.8 billion across nine closed-end funds. It has led the first institutional rounds of several of Europe’s leading biotech companies such as Argenx, Replimune and Dyne Therapeutics as well as clinical-stage companies such as Promedior, which Roche acquired for up to €1.4 billion, and Dezima Pharma, which Amgen acquired for up to €1.55 billion, according to its website.

TVM Capital Life Science

TVM Capital Life Science, which spun out of Munich-headquartered TVM Capital in 2012, has teams based in North America and Europe that invest in early-stage pharmaceutical assets. It has gathered $680 million across two life sciences venture funds, TVM Life Science Innovation I and TVM Life Science Innovation II. An investor syndicate led by Montreal-based fund of funds manager Teralys Capital and pharmaceutical company and strategic partner, Eli Lilly and Company invested $143 million in the first closing of its debut fund. The firm has secured over 100 exits in the portfolio via initial public offerings on the NASDAQ and various European Exchanges and multiple trade sales and mergers, according to its website.