Bristol-Myers Squibb and Johnson & Johnson have invested in BioGeneration Ventures’ (BGV) third fund. The involvement of the Big Pharma companies helped BGV blast past its fundraising target, leaving it with €82 million ($95 million) to invest in early-stage life science companies in Europe.
BGV originally set out to raise €50 million. That goal was already bigger than the two earlier funds combined, but it proved to underestimate the level of interest. BGV turned to its existing investors for the fund’s first close before casting its net wider and finding its previous successes had caught the attention of other financiers.
The standout investments from BGV’s second seed fund were Dezima Pharma and Acerta Pharma, which were snapped up by Amgen and AstraZeneca, respectively, in multibillion-dollar deals. Edward van Wezel, managing partner at BGV, thinks the exits were “obviously a reason” new investors became interested in the fund.
“It validated the fact that there is a possibility to be very successful, even with early-stage companies, in this region of the world. And that then triggered investors to get excited and come to us,” van Wezel said.
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Bristol-Myers and J&J, two of the Big Pharma companies BGV maintains relationships with, saw the fund as a good fit for their European strategies.
BGV also persuaded private equity investment group Schroder Adveq to put up money. Van Wezel said Schroder’s interest in funds such as BGV is new. Having also secured cash from MAN Pension Trust, BGV has a broader portfolio of investors than in the past, a fact van Wezel sees as important for the continuity of future funds and the potential co-investment opportunities it creates.
With the fund now closed, BGV’s attention shifts fully to putting the cash to use. BGV has already invested in five companies, including German immuno-oncology startup Catalym and Dutch blood clotting biotech VarmX. In total, the VC shop plans to invest in about 15 companies, up from the 12 to 14 it targeted when it held the first close last year.
The identities of the initial clutch of portfolio companies reflect BGV’s focus on university spinouts, primarily in the Netherlands, Belgium and Germany, and its intention to made therapeutics 70% to 75% of its portfolio. BGV will put the rest of its cash into medical device and diagnostic startups.