OrbiMed Advisors (New York), a healthcare-dedicated fund manager with roughly $5 billion in assets under management, has raised $550 million for its largest-ever healthcare fund, Jonathan Silverstein, a general partner at the firm, told Medical Device Daily.
The firm closed the fund Monday. Silverstein said the firm began raising its Caduceus Private Investments IV venture capital fund last summer.
OrbiMed's investment advisory business was founded in 1989 with a vision to invest across the spectrum of healthcare companies, from private start-ups to large multinational companies, the firm said. OrbiMed manages the Caduceus Private Investments series of venture capital funds and a family of public equity investment funds.
OrbiMed has raised more than $1.7 billion in capital for its venture capital funds since 2000.
The firm closed a $275 million fund in 2000, a $300 million fund in 2003, and a $530 million fund in 2006 (Medical Device Daily, April 28, 2006), Silverstein said. He said the firm's investments are roughly 60% biotech, 25% to 30% medical devices, and the remaining 10% to 15% is in diagnostics.
OrbiMed said that about 80% of the new fund's capital is from returning investors, and the fund's partners include some of the largest pension plans, endowments, foundations, and sovereign funds globally.
The firm expects the new fund to be invested over a three- to five-year period with individual investments ranging from $10 million to $50 million.
Although it has been a tough financial climate to raise funds in, Silverstein indicated that things might be starting to look up.
"The climate has changed significantly in the last quarter, we saw a lot of interest in the end that helped gain momentum and we think the financing climate has turned around," Silverstein said.
He acknowledged that with changes being discussed at FDA that could make it more expensive for companies to get regulatory clearance, barriers to entry are going to be cash and the need to fund larger clinical trials.
"It is a difficult financial environment for companies to raise money in and as a result we're hopeful that we're going to be able to see a lot of great companies when they're out there financing," Carl Gordon, PhD, a founding general partner at OrbiMed, told MDD. "We're pleased to be able to close our fund and be able to hopefully be an important source of capital for a lot of great companies."
With a background in molecular biology, Gordon's focus with OrbiMed tends to be on the diagnostic side but he is also active on the device side.
"The diagnostic space is a hot area now and we continue to do a lot of work there to identify some more diagnostic companies to do in our fourth fund," Gordon said. "I think that's going to be an important area of focus for us."
Silverstein and Gordon mentioned several of OrbiMed's portfolio companies on the device and diagnostic sides, including LifeCell (Branchburg, New Jersey), which was sold to Kinetic Concepts (San Antonio) for $1.8 billion in 2008 (MDD, May, 28, 2008); Orthovita (Malvern, Pennsylvania), Volcano Therapeutics (San Diego), Adiana (Redwood City, California), which was sold to Cytyc (Marlborough, Massachusetts) in 2007 for $60 million cash plus milestone payments (MDD, March 20, 2007); Singulex (Alameda, California); Given Imaging (Yokneam, Israel); superDimension (Minneapolis) (MDD, June 3, 2005); NxStage Medical (Lawrence, Massachusetts); a Gen-Probe (San Diego) spin off called Roka Biosciences (MDD, Sept. 15, 2009); Cerapedics (Lakewood, Colorado); and Complete Genomics (Mountain View, California).
"We will be seeking novel technologies in medical devices and biopharmaceuticals, anywhere in the world and at any stage of development," Silverstein said. "We are excited about the opportunity to put this money to work in this investing climate."
Early last year OrbiMed supported a $19 million financing round for Singulex. The company said it would use the funds to deploy its product and services in the molecular clinical diagnostic market. Initially, the company is focused on cardiovascular disease risk diagnosis using its assay platform for the biomarker c Troponin, a marker for cardiac necrosis (MDD, Jan. 13, 2009).
Also last year, the firm supported a $45 million Series D round for Complete Genomics, a company with a human genome sequencing technology. Complete Genomics says it allows its customers to buy the genome data they want without having to purchase and operate extensive and complex sequencing instruments (MDD, Aug. 25, 2009).
"We are grateful for the strong support from our existing and new investors, which allowed us to exceed the fund's original target of $500 million," Gordon said. "This is particularly noteworthy given the relative paucity of available capital for new venture capital funds due to the recent credit crisis."
OrbiMed has public and private equity funds, seven partners, and fully dedicated teams on both the private and public side, Silverstein noted.
Amanda Pedersen, 229-471-4212;