By Randall Osborne
With $150 million raised in the second and final closing on its BB BioVentures Fund, Venture Asset Management (VAM) LLC reached the funding goal of $200 million and said it has established one of the larger pure biotech venture funds in the world.
More than half of the money came from Europe, where about a third of the capital will be invested, said J.R. Rothe, senior associate of Cambridge, Mass.-based VAM.
"Maybe with the exception of the United Kingdom, biotech is still very immature in Europe," Rothe said. "We still think there is a lot more good opportunity here in the U.S."
VAM has made two investments in the U.S., with two more planned, Rothe said. Caliper Technologies Corp., of Palo Alto, Calif., received mezzanine-stage financing. The company is focused on miniaturizing laboratory procedures with computer chips and plans an initial public offering in a year or two. The second firm is a young biotech company that makes bioreactors for growing blood stem cells.
In Germany, VAM has invested seed money in Genome Pharmaceuticals Corp., of Munich, a spin-off of Berlin's Max Planck Institute. "To the best of our knowledge, it's the first real functional genomics company in Europe," Rothe said.
The company "will be very attractive to a big pharma player, we believe," he said.
Still, Rothe said, Germany "is many years behind the U.S., in terms of commercialization. There's a huge initiative that aims at developing two or three regions to become biotechnology centers, like Massachusetts or the San Francisco area here."
In Germany, the government provides a strong financial incentive to scientific founders of biotech companies. "It's not equity, but basically a very long-term loan, which you can treat like equity, for practical purposes," Rothe said. "Of course, we want to make best use of the situation."
BB BioVentures has committed about $20 million so far. VAM is the investment manager for the fund, the general partner of which is a joint venture between VAM's corporate parent, MPM Capital LP, also of Cambridge, and Bellevue Asset Management, of Zug, Switzerland.
MPM was founded in 1992. Its main businesses include consulting to the biopharmaceutical industry on mergers and acquisitions. *