Clarus completes largest-ever deal(2)

MPM Capital spin-out Clarus Ventures recently completed its largest investment to date as it moves closer toward full investment of its $500 million debut fund.

Two years after spinning out of MPM Capital, Clarus Ventures is busily deploying capital from its $500 million (€368 million) debut fund, having recently led a $100 million, Series E financing round for spinal implant manufacturer Globus Medical.

Contributing “north of $50 million” in the round represents the largest investment made to date by the US venture capital firm, said Kurt Wheeler, Clarus co-founder and managing director.

 “We’re totally excited about Globus,” said Wheeler. The company’s management, profitability and product pipeline caused Clarus to exceed its fund’s typical investment of $20 million to $30 million per portfolio company, Wheeler said.

But the deal is representative of Clarus’ approach to investing in biotech and medical technology companies; the firm focusses on later stage investments to better mitigate risk and invest larger amounts of capital, Wheeler said.

The venture capital firm, which has offices in South San Francisco and Cambridge, Massachusetts, was founded in early 2005 by six former GPs at healthcare-oriented MPM Capital.

“The six of us who founded Clarus were all general partners of MPM Capital, and we invested [its $900 million third] fund,” he said. “A number of us also invested their second fund, which was a $600 million fund.”

Backgrounds that include roles as Genentechs vice president of research, Roche’s vice president of research, Novartis’ head of molecular biology research, president of Abbott Laboratories’ pharmaceutical division, and Genentech’s vice president of business development, among many others, gives Clarus’ seven partners additional insight into the pharmaceuticals, specialty pharma and medical technologies spaces, Wheeler said.

“We all have very strong operating experience,” he said.

Clarus’ debut fund has invested in approximately 13 companies, including cancer-focussed biotech company Proacta; Aerovance, a company dedicated to developing asthma products; and CoMentis, which discovers and develops drugs for neurovascular diseases like Alzheimer’s.

Once the fund is fully invested, Clarus’ portfolio will consist of roughly 18 to 20 companies; about 75 percent to 80 percent of the portfolio will be made up of biotech companies, with the balance of investments made in the medical technology space.