MPM spin-out raises $660m

Just three years old and without any exits, life sciences-focussed Clarus Ventures has closed its second fund after two months of fundraising.

Cambridge, Massachusetts-based life sciences venture capital firm Clarus Ventures has closed its second fund on $660 million (€445 million) in commitments.
 
The limited partners in the fund consist largely of investors from the first fund at increased commitment levels. A small handful of new investors are mostly endowments, said managing director Jeffrey Laden, adding that the firm wanted a greater number of endowments.
 
Clarus was able to raise the fund in “a little under two months” said Laden, compared with the three months it took to raise the first fund.
 
Clarus’s previous fund closed on $500 million in December 2005 and began investing in early 2006. The fund is currently 90 percent invested and expects to make one to two additional investments before being fully invested by no later than the end of April, according Laden.
 
The first fund has had no exits to date. However, Laden expects the first exits to occur in late 2008 or early 2009. The average investment is currently 13 months old and Clarus targets an average holding period of four to five years.
 
“The market has not materially changed so we continue to have the same investment strategy,” said managing director Nicholas Galaktos. The second fund will have the same strategy as its predecessor, targeting 70 to 80 percent biopharmaceuticals, including specialty pharmaceuticals, with the remainder invested in the medical device sector.
 
The portfolio is balanced by stage. Biopharmaceutical investments are divided between clinical stage and pre-clinical stage and medical device investments are divided between pre-commercialisation stage and commercialisation stage, according to Galaktos.
 
Clarus Ventures was founded in early 2005 by six former GPs at healthcare-oriented MPM Capital. The firm most recently invested in development-stage biotechnology company Taligen Therapeutics and blood sampling company Pelikan Technologies.