Sofinnova scores record-breaking exit

The $700m sale of medical device company CoreValve vindicates the venture firm’s strategy, proving wrong pundits who thought the firm the ‘last of the early stage Mohicans’, according to managing partner Antoine Papiernik. The deal is expected to generate more than 10x for the firm’s investors.

Paris-based venture capital firm Sofinnova Partners has achieved the largest exit in its 35 year history with the $700 million-plus trade sale of medical device company CoreValve.

CoreValve produces a device that provides a minimally-invasive alternative to open-heart surgery. The trade buyer, medical device giant Medtronic, will pay $700 million plus additional milestone payments.

Antoine Papiernik

The deal is expected to net the firm in excess of 10 times its original investment. Sofinnova was the sole investor in CoreValve’s €4.5 million Series A fundraising. It was the largest investor in the €20 million Series B round, when it was joined by Apax France and specialist life sciences investor HealthCap. It also participated in the final $33 million Series C round with US firm Maverick Ventures.

“We had a couple of offers to buy the company just over a year ago, but we resisted,” said Antoine Papiernik, Sofinnova Partners’ managing partner, in an interview, “The numbers were nice, but we

People called us fools and told us we were the 'last of the Mohicans' doing early stage investment.

Antoine Papiernik

saw a life developing the product further ourselves. When we told our investors we had had offers and said no, they said ‘You guys are crazy’. We had a lot of difficult conversations with investors for the following year. Now we look a bit more intelligent.”

To Papiernik the successful exit represents a long-awaited vindication of the venture capital model, which has until recently been overshadowed by the faster, larger returns generated by large buyout groups.

“It’s been hard,” he said, “People called us fools and told us we were the ‘last of the Mohicans’ doing early stage investment.” Papiernik’s response to the critics was that Sofinnova, which has been investing since 1972, knows early stage investment better than anything else and believes that it is the best way to make money.

“To me this is Venture Capital 101. Come in early at the A round, take a large initial stake and take a huge risk, but with a vision of how to solve the risk return. Put your money where your mouth is.”

To me this is Venture Capital 101

Antoine Papiernik

While the CoreValve exit represents the largest ever amount of money generated by a single Sofinnova investment, its exit multiple will not be the firm’s largest ever, due to the amount invested. Papiernik declined to disclose specific returns figures.

Papiernik served as CoreValve’s chairman after the series A funding round and is currently a member of the company’s board of directors.

Amanda Janis contributed to this report.