MPM nets big return on Idenix exit

The US life sciences investor has sold the hepatitis and HIV treatment company to Novartis in a deal that values the business at up to $612m.

Boston-based life sciences venture capital firm MPM Capital has agreed to sell its hepatitis and HIV treatment company Idenix to Novartis Pharma for up to $612 million.


Novartis will acquire 51 per cent of Idenix’s stock for $255m at closing and could pay a further $357m if Idenix’s hepatitis drug candidates reach certain milestones.


Idenix, which is developing drugs to treat HIV and hepatitis, was originally funded by MPM Capital in 1998, when the firm committed $12m to the company, which was then called Novirio. MPM Capital invested an additional $12.5m in 1999, and participated in a $44m round in 2001 led by CSFB Private Equity. The company, which changed names to Idenix in 2002, filed for an IPO in April 2002, but it never got off the ground.


“We believe this deal validates MPM’s underlying principle that biotechnology investments can yield favourable financial results if companies and their venture partners work closely to provide sufficient human and financial resources,” Ansbert Gadicke, a founding general partner of MPM Capital, said. “We see this acquisition as the harbinger of a new model for the biotechnology industry. In this model, venture capitalists take a long-term view of their investments by providing substantial financial resources and support to companies, thereby enabling company management to advance their drug candidates to critical clinical milestones.”


This exit comes in a month of investments for MPM Capital. The firm co-led a $47.5m series B round of funding in neuroscience drug discovery company Hypnion with Forward Ventures. The firm also co-led a $41.5m Series B round of funding in Peptimmune, a developer of targeted immunotherapeutics for the treatment of autoimmune disorders, with New Enterprise Associates.


In December, MPM Capital closed MPM BioVentures III on $900m, making it the largest fund dedicated solely to the healthcare sector raised last year. The fund invests in biotechnology, drug development and medical technology companies across Europe, the US, and Asia.


MPM Capital is a global asset management firm focused solely on health care investing from early stage start-ups to large capitalisation public companies. The firm, which has offices in Boston, South San Francisco and Munich, has $2.1bn in capital under management.


Fully committed existing funds include the $230m MPM BioVentures I family of funds, comprised of BB BioVentures and MPM BioVentures Parallel Fund, which closed in 1997 and 1998, respectively, and have 80 per cent of the investments in biotechnology and 20 per cent in medical devices and e-health, and the $600m MPM BioVentures II fund, which closed in 2000. Both funds included a broad base of large institutional investors in the US and Europe, including pension funds, university endowments, foundations, insurance companies and funds of funds.