LONDON -MVM, a specialist life science venture capital firm, has announced plans to raise a second fund. MVM International Life Sciences Fund II will invest in early-stage life science companies globally.
MVM aims to raise a minimum of GBP40 million ($58.8 million) for its new fund and already has commitments from investors in the company’s first fund -the U.K. Medical Ventures fund – for at least GBP22.5 million ($33.1 million). Hoare Govett Ltd. is acting as sponsor to the fund.
MVM’s health-care team focuses on start-up and early-stage private companies. MVM managed funds have exclusive rights to technology developed by the Medical Research Council (MRC), providing the company with unique, high quality deal flow. Five of MVM’s current investments are in companies that are developing MRC technology.
Dr. Stephen Reeders, MVM’s chief executive, said that MVM is clearly differentiated from other funds by its focus on companies at the earliest stages of development. Reeders said companies in the earlier development stages have a very strong supply of opportunities but few investors willing to evaluate them.
“It is extremely gratifying to see that the investors in our first fund are keen to support the new fund,” he added. “I believe this interest reflects the attractive portfolio we have built up, our distinctive market position and our close links with the MRC. Sophisticated investors realize that the high quality deal flow we have developed gives us a real advantage.
MVM raised its first fund in April 1998 and has been involved in the creation and financing of life science companies in the U.K., Europe and the U.S. Investors in the first fund had a wide geographical spread and included Johnson & Johnson Development Corp., Mitsubishi, Shell Pension Fund and Prudential.
The first fund is about two thirds invested. The average investment size is between GBP3 million ($4.4 million) and GBP3.5 million ($5.1 million). The new fund will target a similar investment range.
Investments led by MVM in British companies include Ardana Bioscience Ltd., which is addressing the unmet need for women’s health products; Oxxon Pharmaccines Ltd., which is developing therapeutic vaccines for malaria, hepatitis, HIV and cancer; and Diversys Ltd., which is developing tools for antibody and protein engineering based on the work of scientists at the MRC’s Center for Protein Engineering.
Two recent exit successes for the company this year have included U.S. companies. New Chemical Entities Inc., a drug discovery company was sold to Albany Molecular Research (AMRI), just a year after MVM had invested in the company. AMRI acquired New Chemical Entities for $22.4 million and assumed approximately $600,000 in outstanding debt. The company will be renamed the Bothell Research Center.
Third Wave Technologies, which develops and provides DNA and RNA analysis technologies for use in genome research, pharmacogenomics and clinical diagnosis held its initial public offering on Nasdaq last month. The company offered 7.5 million shares of its common stock at $11.00 per share.