Merlin Biosciences, the UK life sciences investor headed by Sir Christopher Evans, has announced the launch of a Helsinki office which the firm hopes will further consolidate its position in the Nordic market.
Merlin has made a number of investments in Finland, most recently backing the merger of Eurogene and Quattrogene to form Ark Therapeutics.
Merlin has also built a relationship with SITRA, one of Finland’s largest VC organisations specialised in early stage life sciences investments.
Finnish Industry Investment (FII), a government sponsored initiative to promote investment in innovations, earlier this year became a limited partner in Merlin Biosciences Fund III, which held a first close E93m in August 2002 and which is expected to hold a final close later this year.
Merlin’s Finnish operations will be run by newly appointed Niilo Santasalo, formerly a senior investment banker at PCA Corporate Finance.
“The Finnish industry, although young, is rapidly emerging and will benefit from the presence of an international VC such as Merlin to help build and sustain solid biotech businesses,” said Mark Clement, general partner at Merlin. “[We are] fortunate to have Niilo Santasalo join us to spearhead the Finnish operation. His local industry knowledge and global perspective is a key asset to Merlin as we explore investment opportunities.”
Finland’s biotechnology industry is one of its most important hi-tech sectors, with 120 companies employing over 4,000 people. With support from the Finnish government, five biotech clusters have emerged around the cities of Helsinki, Turku, Tampere, Kuopio and Oulu.
Funding of biotechnology companies is almost exclusively from venture capital sources, 95 per cent of which are based locally according to Merlin.
Merlin’s second fund closed for subscription in August 2000 and is now fully committed. It has a portfolio of 19 biotechnology companies and two medical device companies. 65 per cent of Fund II’s investments are in UK companies and 35 per cent are in European and US companies. Its average equity investment is E8m to E10m per company.
The biggest players in the Scandinavian market at present are BioFund and SITRA in Finland, and to some extent the Swedish VCs such as HealthCap, Nordic Biotech and Scandinavian Life Science. A spokesperson for Merlin said that the firm hoped to engage in syndication opportunities over the coming months and years.