A Medical Device Daily
Vivo Ventures (Palo Alto, California) reported closing of Vivo Ventures Fund VI at $275 million, bringing the firm's total funds under management to more than $650 million. Dr. Frank Kung, R. Edgar Engleman and Dr. Albert Cha, who managed Vivo Ventures Fund V, are the managing members of the new fund, while Dr. Chen Yu, previously a principal, was promoted to partner.
The new Fund will follow the same general approach as Vivo's prior funds and invest in companies developing and commercializing therapeutic products — devices and drugs that treat human disease.
Vivo said that since its launch in 1997, the funds have invested in 50 such companies, typically leading or co-leading their first institutional rounds. The new Fund will invest mainly in private companies in the U.S. Vivo VI will also invest in public therapeutics companies, as have all of the previous Vivo funds, and in companies outside the U.S.
Investors in the new fund include university endowments, foundations, funds of funds, financial institutions, family offices and pension funds.
In addition to investors from the U.S. and Asia that had participated in Vivo's earlier funds, Vivo VI added a number of new institutional investors from the U.S. and Europe.
Emergent Technologies (ETI; Austin, Texas) reported final closing of Emergent Technologies Fund IV, totaling $27 million, focused on commercializing technologies developed out of the University of Texas (UT; Houston).
ETI said it plans to utilize the fund to commercialize up to 30 different technology applications.
Fund IV is made up of several large family office and institutional investors, including San Antonio businessman Red McCombs and two other Texas billionaires. The Red McCombs investment marks his first toward a biotech-focused fund, Emergent said.
All Fund IV investors are located in Texas, including investors in San Antonio, Austin, Amarillo, Dallas, Fort Worth, Houston and Lubbock.
President of Fund IV, David Lee, said, "We are proud to be underwritten by such a strong group of investors who appreciate the important role we play for the university, for industry, and for regional economic development. ETI's unique business model is what attracted these high-caliber limited partners to Fund IV."
Thomas Harlan, president/CEO of ETI, said, "Our market-driven, technology commercialization model is focused on rapidly bridging the gap from university-based science to technology applications that can fill the dwindling R&D pipelines within the biotechnology industry."
"The ETI model allows us to leverage the fund's investments with continued grant funding and industry partner resources," said Harlan. "This additional capital is non-dilutive to the fund and university equity interests in the portfolio companies, which creates an attractive financial model. For every $1 million we invest in a portfolio company, up to an additional $12 million from these alternative funding sources is invested in the technology. As a result, our $27 million fund has the equivalent commercialization potential of a $300 million fund managed via a traditional venture capital model."
Lee added, "UT represents an enormous opportunity for ETI, with over 117 U.S. patents and 655 invention disclosures last year alone." Fund IV has already begun a commercialization strategy with two biotech companies formed in the last six months, and several others in the process of launching in 2007.
Mimetic Solutions (Austin, Texas) specializes in recognitive or "smart" chemistry that can recognize a specific biological marker, triggering release of a drug or other active compound. Beacon Sciences (also Austin) specializes in a proprietary "lock-and-key" chemistry, coupled with chemiluminescent chemistry, with applications in medical diagnostics, environmental testing and biodefense.
ETI, founded in 1989 by Thomas Harlan, describes itself as a turnkey solution for converting university science into high-return ventures.
In other financing activity:
• The Quantum Group (Wellington, Florida) reported closing on $1.55 million new funding, its third round of debt financing. Quantum said that to date it has raised more than $5.85 million in the last 12 months.
Further, the company unveiled plans to enter an additional four markets in 2007, expanding to 26 counties, representing 82% of Florida's 65-and-over population.
Quantum is one of Florida's largest healthcare provider systems. In conjunction with its subsidiary companies, Renaissance Health System of Florida and QMed BILLING, Quantum provides administrative and support services to the Florida managed care industry as well as to Florida physicians.