DUBLIN, Ireland — The Danish mutual fund BankInvest is raising US$50 million for a new biotechnology fund that will pursue investment opportunities in Denmark and in neighboring regions.

The new fund, called the BankInvest Biomedical Development Fund, plans to follow an aggressive investment strategy, said Florian Schoenharting, head of research and development at Copenhagen-based BankInvest. It will become involved in up to seven projects per annum, and he expects to invest about half of its capital this year.

The fund already is in discussions with the promoters of four drug development projects, only one of which is an existing company. The other three are all in the process of formation.

The sense of urgency derives from a feeling that 1998 will be a critical year for European biotechnology. The capital markets are now attuned to biotech, and scientists are more open to commercializing their work, Schoenharting said. He expects company valuations to rise to levels comparable with those in the U.S. as competition for investment opportunities begins to intensify, he said.

The fund will invest in early-stage firms and will look at mezzanine financing opportunities, but it also aims to promote the formation of companies that would otherwise never get started.

Danish science suffers from a significant degree of under-investment in comparison with the U.S., Schoenharting said. Even allowing for the size disparity between the two countries, Danish research receives only one tenth the venture capital investment enjoyed by U.S. science.

According to a study at the University of Umeo, in Sweden, Danish research papers generated an average venture capital investment of 431 European Currency Units (ECU) from 1992 to 1996. The figure for U.S. papers was 5,657 ECU for the same period.

The new fund complements a 10-year-old BankInvest biotechnology fund, which has a portfolio of some 35 companies, mainly based in the U.S. and the U.K.

"We've been preaching the gospel of biotechnology for many years," said Schoenharting. Its major shareholdings are in Biochem Pharma, of Laval, Quebec; Gilead Sciences Inc., of Foster City, Calif.; Celltech plc., of Slough, U.K.; and NeuroSearch, of Glostrup, Denmark.

Several major pharmaceutical companies have expressed an interest in investing in the new fund, said Schoenharting. BankInvest's existing institutional investors are participating in the new fund also.

"The hit rate is enormously high," he said. BankInvest has attracted two high-profile recruits to its advisory board on the strength of the current initiative — the chairman and cofounder of NeuroSearch, Asger Aamund, who will chair the advisory board of the new fund; and the neuroscientist Leslie Iversen, of Oxford University, who was previously director of neuroscience research for Merck & Co., of Whitehouse Station, N.J.