PARIS – Bpifrance and Sanofi SA, of Paris, reported the launch of Innobio 2, an investment fund worth $153 million that is slated to back life sciences.
Sanofi is putting $57 million into the fund, and Bpifrance is contributing up to 49 percent. Innobio 2 is aiming to reach between $227 million and $283 million, following the anticipated addition of pharmaceutical laboratories and med-tech firms.
"The ambition for this fund is to give encouragement to innovative French and European microenterprises and [small and medium-sized enterprises] exploring technology in the fields of biopharmaceutical products, medical devices, bioprocesses and diagnostics associated with using medication," Laurent Arthaud, managing director for life sciences, ecotechnologies and French tech at Bpifrance, told BioWorld MedTech.
Boosting a flagging industry
In France, $8 billion is invested each year in R&D by all of the private players in the health care sector. That figure represents 20 percent of all R&D expenditure by industrial enterprise in that country. "In addition, France is the foremost country in Europe in terms of public investment in R&D in the health care sector, with some leading research bodies," said Prime Minister Edouard Philippe during the 8th Strategic Council of Healthcare Industries.
"We want to return France to a central position in an era when the U.S., China and Switzerland are our only competitors in the health care economy," said Agnés Pannier Runacher, secretary of state at the Ministry of Economics and Finance. With the Innobio 2 fund, the French government is adding a new financial tool for steadying innovation companies in the health care sector. The French state and industry estimate that $567 million in investment is needed over five years to regain its leading global position.
Bpifrance supporting entrepreneurs
Bpifrance offers continuous financing to innovation enterprises. It provides a range of finance solutions – from seed to IPO – including buyout, credit, guarantees and equity investment. With more than 2,000 employees, it is the first public financial operator for innovation in health care in France. It manages nine investment funds, totaling $2.3 billion under management, of which 40 percent is in health care."We benefit from in-depth knowledge of the French life sciences market, with access to almost all the deals flowing into private companies raising more than $13 million," said Arthaud. "We set up the Innobio 2 fund as an intelligent alliance between public investors and industry in France – a unique $153 million public-private partnership," he added.
Bpifrance is relying on industry experience from working on the French market when selecting Innobio 2 investments. This formula has worked before. Innobio 2 is taking the baton from the Innobio 1 fund, launched in 2009. This made 10 investments each in French biotechs and med techs, of which 13 came from public research, totaling more than $170 million. This made it possible to raise $1.6 billion in total for the sectors. "Eleven of these investments were floated on the stock market," including Biom'up SA, Dbv Technologies SA, Pixium Vision SA and Supersonic Imagine SA.
The Innobio 2 fund could be invested in European companies that have "a significant share of their activities in France." This sentiment reflects the desire of the French government to turn to European cooperation. Its scope is being extended to digital health care.
Bpifrance plans to invest in three new companies each year until 2024 at an average rate of $5.7 million each. These firms should be close to or beginning clinical development.
With that said, "we could go as far as $16 million for a single company," said Arthaud. It will play a significant role in first and second round table meetings, and will invest in companies' capital as a minority shareholder. It will take a lead or co-lead position in most deals and is not restricted to France. Sanofi CEO Oliver Brandicourt is banking on a rapid rise in Innobio 2 funding, with a target of $1.14 billion from direct and indirect funding rounds over the next five years.