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Insight & Intelligence™ : Jun 17, 2013

Top 20 Corporate Venture Funds

Working for a startup or an adventurous biotech or biopharma firm with a lot of great ideas? Meet your new best friends.

Following is our list of 20 venture funds established by 16 top pharmaceutical and biotechnology companies based on revenue. The funds are ranked by total size, except for funds that disclose resources by the total size of annual award, which are ranked separately. Funds that do not disclose either total size or total annual giving are unranked.

Corporate venture funds are listed with their name; resources; current portfolio (mostly companies, though some funds invest in other funds); figure or range of investment per company, with ranges for initial investments where provided; investment preferences; and year established. Data for the list originated with the websites of the funds, with the findings emailed to corporate spokespeople for verification and, more often than not, updating with current figures on portfolio companies and investment ranges. In some cases, results vary with earlier-published figures or information.

The data appears to show a “sweet spot” for corporate venture funds of between $100 million and $250 million; ten of the 20 funds listed had total resources in that range.

The list does not include funds formed jointly by corporate venture funds and venture capital firms, mostly to develop early-stage companies and their therapeutics. A sufficient number of such funds have been created to warrant a possible separate list—especially in recent months, as biopharmas have scrambled to cut internal R&D costs. Also not included in the list is the former Biogen Idec New Venture Fund, which the company shut down in 2011, along with a startup incubator, in a shift of resources to internal R&D projects, as GEN reported at the time.

#20. SR One (GlaxoSmithKline)1

Resources: $30 million to $50 million in five or six companies a year; more than $680 million invested since 1985

Current portfolio: 31 private and public companies

Amount of investment: Ranges from thousands to millions1

Investment preferences: Innovative technologies across therapeutic areas

Year established: 1985

#19. Pfizer Venture Investments

Resources: Annual budget of $50 million for private investments.

Current portfolio: Number of companies unavailable2

Amount of investment: Up to $10 million per round in selected companies in any stage of development, with a strong focus on growth stage opportunities.

Investment Preferences: A broad array of healthcare related areas, including therapeutics, platform technologies, diagnostics, drug delivery, pharmaceutical services, healthcare IT, and other technologies impacting drug discovery and development.

Year established: 2004

#18. Novo Ventures

Resources: Up to $140 million invested annually. Current invested cost of the Novo Ventures’ portfolio is $470 million.

Current portfolio: 40 companies

Amount of investment: Investments typically range from an initial $5 million to $30 million per transaction, with capacity to make follow-on investments. May invest at any stage of development: Seed capital, venture capital, IPOs, and public companies

Investment preferences: Companies that specialize in development of new drugs, new procedures for diagnosis and control of diseases, development of medical devices and instruments, and industrial biotechnology. Fund seeks promising life science companies—private and public—whose products or research address medical, scientific or environmental needs

Year established: 2000

#17. Novartis Korea Venture Fund

Resources: Commitment of $20 million over five years

Current portfolio: Three companies

Amount of investment: Ranges from $1 million to $3 million

Investment preferences: Novel therapeutics and platforms for human and animal health, with a focus on diseases prevalent in Asia

Year established: 2008

#16. Merck Serono Entrepreneur Partnership Program (Merck KGaA)

Resources: €30 million ($39.6 million) fund created following the decision to close Merck Serono’s Geneva site, in order to limit the impact on local employment. “Additional projects are in the process of being evaluated and will be announced in the course of 2013,” Merck Serono said January 233,4

Current portfolio: Six companies as of May 15, all spun off by Geneva-based Merck Serono contractors or employees

Amount of investment: Figure or range unavailable

Investment preferences: Support for creation of spinoff companies

Year established: 2012

#15. Strategic Investment Group (Shire)

Resources: $50 million in initial capital funding

Current portfolio: Number of companies unavailable2

Amount of investment: Typical initial investment of $2 million to $5 million per company per round.

Investment preferences: A broad range of therapeutic areas of interest including, but not limited to allergy, central nervous system (CNS) and neuropsychiatry, gastrointestinal, hematology, and orphan genetic diseases. SIG also pursues investments in “white space” technology, areas outside the traditional bounds of its existing businesses. SIG co-invests as part of a syndicate usually consisting of a mix of venture capital partners and other corporate strategic investors. The typical investment target is a private company pursuing Series A/B/C financing.

Year established: 2011

#14. Takeda Ventures (TVI; formerly Takeda Research Investment)

Resources: $54 million under management; evergreen fund structure

Current portfolio: 13 companies

Amount of investment: Up to $5 million per financing event; Seed stage to mid-stage financings

Investment preferences: Up to a 15% equity interest as co-investors, where lead investors would include venture capital firms, private equity funds, angels, or institutional investors. Presently concentrating on drugs and biotherapeutics to treat cancer, metabolic disorders (obesity, diabetes, and dyslipidemias), cardiovascular disorders, chronic inflammatory and immune disorders (particularly for gastrointestinal and bone and joint diseases) and diseases for the central nervous system (specifically Alzheimer’s disease and schizophrenia). Additional areas of strategic importance are regenerative medicines, RNA and DNA modulation, novel vaccines technologies, and innovative protein and peptide biotherapeutics. TVI does not invest in anti-infective diseases, medical devices, or diagnostics platforms

Year established: 2001; name changed in 2011

#11. (tie) Sanofi-Genzyme BioVentures (formerly Genzyme Ventures)

Resources: $100 million strategic corporate venture capital fund

Current portfolio: Nine companies since 2007

Amount of investment: $5 million maximum in a company per round, $15 million maximum over its lifetime.

Investment preferences: Direct investment in early-stage innovative life science companies that demonstrate promise to deliver breakthrough products that may be future Sanofi pipeline candidates. Fund seeks investments that align with Sanofi’s current and future areas of business interest. Sanofi cites as areas of focus animal health, cardiovascular disease, degenerative diseases, diabetes, immune-mediated diseases, infectious diseases, multiple sclerosis, oncology, ophthalmology, rare diseases, and vaccines, while Genzyme specializes in rare diseases and neuroimmunological disorders such as multiple sclerosis

Year established: 2001 (as Genzyme Ventures)

#11. (tie) MP Healthcare Venture Management (MPH; Mitsubishi Tanabe Pharma Group)

Resources: $100 million. Firm is a jointly-owned subsidiary of Mitsubishi Tanabe Pharma Corp. and Mitsubishi Chemical Holdings Corp.

Current portfolio: Eight companies

Amount of investment: $5 million per company.

Investment preferences: Seed to late-stage life sciences companies based principally in North America and Europe, usually as part of an investment syndicate with other leading VC firms. MPH invests in companies developing novel therapeutics (small molecule and biotherapeutics), technology platforms, diagnostics, and vaccines. MPH is interested in novel drugs and diagnostics in various disease areas, including cardiovascular, immunology, and inflammation, metabolic disease, nephrology, neuroscience, and stroke

Year established: 2006

#11. (tie) Lilly Asian Ventures

Resources: $100 million

Current portfolio: 11 companies

Amount of investment: $5 million to $15 million per company

Investment preferences: Companies with potential to be top-ranked in its category in China, whether a drugmaker or pharmaceutical service provider, and potential to conduct business outside China

Year established: 2008

#9. (tie) MS Ventures (Merck KGaA)

Resources: €100 million ($132.1 million), announced May 16; fund launched with €40 million ($52.9 million)5

Current portfolio: 12 companies

Amount of investment: Figure or range per company unavailable2

Investment preferences: Primarily early-stage investments in companies that develop products and/ or technologies that could benefit patients in therapeutic areas relevant to Merck Serono. Company’s core therapeutic areas include Autoimmune & Inflammatory diseases, endocrinology, fertility, neurodegenerative diseases, oncology, and rheumatology.

Also manages €10 million ($13.2 million) investment to provide seed funding, plus access to Merck Serono’s Inter-Lab Research and Development Center in Yavne, Israel, for Israeli startups with potential for developing innovations with future application in the company’s areas of focus. The first startup has moved to Inter-Lab: “The goal is to have at least six startups working to transform the ideas of Israeli scientists into new medications or technologies by 2018.” according to a May 15 report in company online publication “M: The Explorer Magazine.” 

Year established: 2009

#9. (tie) Boehringer Ingelheim Ventures

Resources: €100 million ($132.1 million)3

Current portfolio: Eight companies and one fund-in-fund investment

Amount of investment: Opening investments of up to €2 million ($2.6 million) per venture at the early stage, with subsequent staged investments intended to align with each venture’s progress, up to a total of €10 million ($13.2 million) to €15 million ($19.8 million) per venture over the life of a company

Investment preferences: Significant enhancements in patient care through innovative and pioneering science including (but not limited to) addressing underexplored targets and indications, T-cell and other next-generation vaccines, next-generation NBEs such as cancer immunotherapeutics, regenerative medicine, and new platforms for identifying targets and biomarkers

Year established: 2010

#5. (tie) Novartis Option Fund

Resources: Initial fund of $200 million toward seed innovative startup companies during their earliest stages

Current portfolio: Nine companies

Amount of investment: $20 million to $25 million over the life of a company. The initial equity investment can be coupled with an option to a specific therapeutic program giving early validation for the startup company’s technology

Investment preferences: Early-stage, high-risk areas enabling the development of novel programs and technologies

Year established: 2007

#5. (tie) Lilly Ventures

Resources: $200 million under management

Current portfolio: 15 companies

Amount of investment: $5 million to $15 million per company

Investment preferences: Biotech companies that leverage proprietary drug discovery or development technologies to build a multi-product pipeline; companies focused on the convergence of devices with pharmaceuticals or diagnostics; North American and European regions

Year established: 2001

#5. (tie) Baxter Ventures

Resources: $200 million

Current portfolio: Seven investments, most being direct investment in companies, with the rest being investments in life sciences venture funds

Amount of investment: A typical equity investment is $1 million to $5 million initial investment, with a potential of investing up to $10 million over the life of the company

Investment preferences: Companies with innovative technologies, products, and therapies with the potential to improve patient care globally and maximize value for investors and entrepreneurs; Focus areas include therapeutic areas complementary to those of Baxter's existing Medical Products and BioScience businesses, as well as cutting-edge technologies and therapies outside of Baxter’s current product portfolio that have sustainable long-term growth potential.

Year established: 2011

#5. (tie) Amgen Ventures

Resources: $200 million in two funds: Amgen Ventures I, a $100 million fund founded 2004; and Amgen Ventures II, a $100 million fund founded 2012

Current portfolio: 13 companies—12 in Amgen Ventures I; one in Amgen Ventures II

Amount of investment: Typically $3 million to 5 million per company per round, and may invest up to $15 million over the life of the company.

Investment preferences: Early-stage to early clinical companies developing human therapeutics. While the fund’s focus is primarily in areas of current therapeutic interest to Amgen—which include oncology, inflammation, hematology/nephrology, metabolic disorders, neuroscience and cardiovascular—the fund also seeks novel modalities with potential to address targets in both current and emerging therapeutic areas of interest. We will also review companies developing drug delivery and monitoring devices. Currently seeking investments in North America, Europe, and the U.K.

Year established: 2004

#4. Merck Research Ventures Fund (Merck & Co.)6

Resources: $250 million evergreen fund. First phase was to establish a network of fund-to-fund investments. Majority of activity going forward will be direct minority equity investments in biotech companies, including formation of new startups

Current portfolio: No direct investments in companies; limited partner investments in five venture capital funds as of April 2013, including an undisclosed sum in the $270 million fourth fund of Flagship Ventures, and the establishment, with Lumira Capital, of the Merck-Lumira Bioscience Fund in Canada

Amount of investment: Flexible, but target $3 million to $7 million during first round, with follow-on investment up to 5–15% ownership

Investment preferences: New ventures that apply scientific breakthroughs to the development of new drugs (small molecules, biologics, vaccines) in areas of unmet medical need

Year established: 2011

#3. MedImmune Ventures (AstraZeneca)

Resources: $400 million under management in an evergreen fund

Current portfolio: 15 companies

Amount of investment: $15 million to $25 million over the life of an investment

Investment preferences: Private companies that develop small and large molecules, vaccines, pharmaceutical technologies and platforms, with early to late stage products and technologies, in early (e.g. seed) to late (e.g. mezzanine) rounds of financing. Geographic scope includes North America, Western Europe, Israel and Australia. The fund also seek investments in medical device, diagnostic, imaging and healthcare IT companies pertaining to the discovery, development and commercialization of pharmaceutical products. Therapeutic scope includes cardiology, gastroenterology, neuroscience, oncology, pulmonology, infectious disease, inflammation and metabolism

Year established: 2002

#2. Roche Venture Fund

Resources: Evergreen fund of CHF 500 million ($534.2 million), of which about 40% is currently invested3

Current portfolio: About 30 companies in 10 countries across Europe, North America and the Pacific region

Amount of investment: Initial investment of CHF 1 million (about $1.1 million) to CHF 5 million ($5.3 million)3

Investment preferences: Companies with innovative new technologies, medicines or diagnostics, in areas of interest, including oncology, central nervous system; inflammation; metabolic diseases; virology; in vitro diagnostics; diabetes care; molecular diagnostics; and innovative research technologies. Also, Series B companies, though the Fund has invested earlier with a syndicate. For therapeutic biotechs, Fund is “willing to invest in companies that are still 18–24 months away from the clinic.”7

Year established: 2002

#1. Novartis Venture Fund

Resources: More than $600 million under management via evergreen fund re-investing returns generated

Current portfolio: Approximately 60 companies

Amount of investment: Up to $30 million per company over its life; minimum can be as little as $100,000

Investment preferences: Novel therapeutics and platforms for human and animal health; diagnostics or drug delivery systems. “We look for unmet need and clinical impact, novel proprietary science and understanding of mechanism, management, and board experience and capital efficiency in the program.”8

Year established: 1996

Honorable Mentions

The following funds did not make the cut simply because we weren't able to ascertain how big they are. Still, don't write off these guys as skinflints:

AbbVie Biotech Ventures Inc. (ABVI; formerly Abbott Biotech Ventures)

Resources: Size of current fund unavailable2

Current portfolio: Number of companies unavailable2

Amount of investment: Ranges from several hundred thousand dollars up to several million, depending on the opportunity and development stage. ABVI says it will always remain a minority investor.

Investment preferences: Companies with programs ranging from preclinical to early proof-of-concept are of highest interest. ABVI invests in technologies that are strategic to AbbVie such as neuroscience, immunology, virology, and oncology, as well as emerging or more opportunistic areas of innovation that have the potential to complement AbbVie’s existing portfolio or to expand AbbVie’s future business reach.

Year established: 2013

Astellas Venture Management (AVM)

Resources: Combined size of funds unavailable9

Current portfolio: 19 companies—14 funded via Astellas Venture Fund I, managed since 2005; three via Astellas Venture Capital since 2000; and two via Fujisawa Investments for Entrepreneurship (FITE) funds I and II, managed since 1999 and 2001, respectively

Amount of investment: Figure or range unavailable

Investment preferences: Privately owned biotechnology companies focused on discovering and developing human therapeutics. AVM seeks companies with potential to become Astellas Pharma’s collaboration partners in R&D, in disease fields aligned with Astellas’ priority therapeutic categories of diabetes complications and other metabolic diseases, immunology and infectious diseases, neuroscience, oncology, and urology

Year established: 1999

Johnson & Johnson Development Corp. (JJDC)

Resources: Size of fund undisclosed

Current portfolio: Undisclosed number of companies10

Amount of investment: Undisclosed10

Investment preferences: Pharmaceuticals and biotechnologies “that create synergistic solutions in” treating and curing chronic and life-threatening diseases, with clinically validated solutions across pharmaceuticals, regenerative medicine, gene therapies, and tissue and organ engineering. Also, medical device and diagnostic “solutions that have significant addressable markets” through early detection, prevention, and remediation of disease and are supported with validated data and research.11

Year established: 1973

Novo Growth Equity (Novo A/S)

Resources: Current figure not disclosed12

Current portfolio: Five companies

Amount of investment: Depends on company; amount can total “several” billion DKK per company13

Investment preferences: Late-stage funding for well-established life science companies with positive cash flow, strongly positioned products and attractive prospects.

Year established: 2009