A Medical Device Daily
Santé Ventures (Austin, Texas; Brentwood, Tennessee) reported that the firm has closed its debut venture capital fund with $130 million in capital, the maximum amount permitted in the original offering, targeted at $100 million.
The healthcare-focused fund invests primarily in seed and early-stage companies developing new medical technologies and healthcare services.
The firm said it plans to invest $2 million to $6 million of seed money into individual companies in the healthcare services and information technology sectors and in medical technologies
Santé is targeting Nashville, Tennessee, Austin, and the middle of the country because it said those areas receive far less venture capital than the coasts and opportunities to invest exceed available capital, said Douglas French, a managing director and a past president/CEO of Ascension Health (St. Louis).
"From an investing standpoint, healthcare is a place where there's a lot of innovation occurring," French told the Nashville Tennessean. "There are a lot of entrepreneurs that are working to fix what doesn't work in healthcare and also create new opportunities."
The other managing directors are Joe Cunningham, MD, and Kevin Lalande. Cunningham, an Austin physician, helped run a $125 million venture fund for Ascension. Lalande spent seven years as a principal in Austin Ventures and, with French and Cunningham, built a healthcare practice for the Texas venture capital firm.
Although the fund closed yesterday, Santé said it already has made its first investment.
It committed $5.5 million as the lead investor in a $16 million financing of Spinal Restoration (Austin, Texas), a company developing the Biostat disc augmentation system, a minimally invasive, biologic treatment for discogenic low back pain.
French told the Tennessean that he sees Santé making 15 to 20 investments in the next five years, a process that involves reviewing hundreds of proposals for prospects that fit its criteria.
"The way this works, we'll look at probably 400 companies a year to make four or five investments," he said. "We're very selective. We look for opportunities that have the potential to be a real breakthrough. They have an excellent management team with a great track record and are capital efficient in the amount of capital they need to get something to the market."
Collectively, Santé said that its team has invested more than $100 million in venture capital in two dozen healthcare companies over the last decade, yielding to date four IPOs totaling $2.8 billion in first-day market capitalization, four trade sales, and 15 remaining privately held companies.
The firm said it maintains a close working relationship with Austin Ventures.
In other financing news:
Medical Properties Trust (MPT; Birmingham, Alabama) reported that it has settled the forward sale agreements entered into in connection with the company's follow-on offering of 12.2 million common shares in February, as previously disclosed.
In settling the forward sale agreements, the company issued 3 million shares of common stock to affiliates of UBS Securities and Wachovia Capital Markets in exchange for proceeds of $14.43 per share for a total of about $43.3 million.
The company said it intends to initially use these proceeds to reduce debt outstanding under its line of credit facilities.
MPT is a real estate investment trust formed to capitalize on trends in healthcare delivery.