Merlin benefits from sustained biotech optimism

The biotechnology investor has held a first close at E125m for its third Biosciences fund, targeting a final close next year at E250m.

Merlin Biosciences, the UK-based venture capital investor specialising in biotechnology and life science investments, has held a first closing of its latest fund at E125m.

Merlin Biosciences Fund III, which will invest in biotechnology companies across Europe, has secured E93m of funding from previous investors including a E30m investment from WestLB, a cornerstone investor in the fund. Westport Private Equity and the European Investment Fund, which contributed E25m are also repeat investors. New investors to the fund include Japanese investors NIF Ventures and Marubeni.

Sir Christopher Evans, founder and chairman of Merlin Biosciences, said he was impressed by the level of support for the fund. “In a tightening market, Merlin is well-placed to capitalise on the value opportunities that are present in the European market.” The new fund will invest between E10m to E18m per investee company.

The firm is targeting a final closing in 2003, and with biotechnology still one of the more resilient venture sectors amid the current downturn, is confident of achieving its E250m target. A strong sign that the sector remains active came last week when KuDOS, the Cambridge-based cancer treatment organisation, completed a E40m third round of financing.

Merlin currently manages funds in excess of E500m. The Merlin Biosciences Fund closed in August 2000 with total commitments of E247m. Recent investments from the fund have included participation in the £16m financing of Arakis, a UK-based speciality pharmaceutical producer, and Cambridge Biotechnology, which secured £6m in a first round of financing in July.