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May 29, 2012

Eli Lilly Invests C$40M in C$150M Early-Stage Drug Development Fund

  • Eli Lilly will invest C$40 million (about $39 million) in a new C$150 million (roughly $146.5 million) early-stage fund designed to serve as a Canadian unit of the pharma giant’s global drug development network. Montreal-based Teralys Capital will hold the largest stake in the new TVM Life Science Ventures VII with an investment of C$65 million (about $63.4 million).

    Teralys manages more than C$700 million ($683.3 million) in assets. Other investors in the fund will include BDC Venture Capital with a stake of C$20 million ($19.5 million), Fondaction CSN with C$7 million ($6.8 million), and Advantus Capital Management with an undisclosed investment. Partners expect to recoup their investment in about 10 years.

    The TVM fund closed at an initial C$150 million, a sum expected to grow over time. The fund said it will help create in Canada numerous single therapeutic asset companies that will develop drugs from candidate-selection phase to clinical proof of concept.

    That activity will take place through a new Canadian unit to be established by Lilly of its Chorus global early-phase drug development network. Chorus uses a virtual model that draws upon "internal Lilly skills, contract research organizations, and external consultants with very specific areas of expertise", with the goal of cost-effectively advancing potential medicines.

    Michael Mason, president of Eli Lilly Canada, said that the new investment "will support a more efficient way to develop innovation in Canada". He added that establishing a Chorus division in Montreal "illustrates Lilly's commitment to 'research without walls' and to investing in R&D in Canada." Chorus Canada will work with development service providers across Québec and elsewhere to offer development services to project-focused companies based primarily in the province.

    “It took three years of grueling work to put it all together at a time when venture-capital firms had virtually closed the window,” Jacques Bernier, managing partner of Teralys Capital, said in an itnerview with the Montreal Gazette. “The fund’s presence in Montreal along with Chorus Canada will create new jobs and reinvigorate Quebec’s research.”

    Teralys aims to raise $825 million for investment in tech-focused venture capital and growth-oriented funds, and was established with $250 million from public pension fund manager La Caisse de dépôt et placement du Québec; $250 million from the Solidarity Fund QFL; and $200 million from the Quebec government’s Investissement Canada, with plans to raise $125 million from institutional and private investors.

    News of the TVM fund and Lilly’s participation in it comes two months after Teralys joined Lumira Capital, Merck & Co., and other partners to establish a multimillion-dollar R&D fund designed to invest in early-stage biotechnology companies with operations in Québec. Merck said at the time it would contribute $35 million to the Merck Lumira Biosciences Fund, which had its initial closing at $43 million and plans to grow to $50 million.

    --
    To read the story from the Montreal Gazette , click here.


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