Investors Go With Gut Ahead of Microbiome Therapy Boom, Says Seventure

Xconomy National — 

French VC firm Seventure is raising over €200 million in a second dedicated fund focused on the microbiome and says the therapeutic space will mature within the next three years.

In March, France’s Seventure announced it is looking to raise €200 million ($220 million) in its Health for Life Capital II fund dedicated to the microbiome, nutrition, and digital/connected health sectors.

The fundraising is still finishing up and the total could be closer to €250 million with increased interest in the microbiome sector coming from numerous industries, Eric de La Fortelle, venture partner at the firm said at the recent BIO-Europe meeting in Hamburg, Germany.

“It’s not only pharma companies but also nutrition companies, ingredient makers, animal health companies etc [which] are interested in the microbiome, and the interest keeps growing,” he told seasoned Xconomy journalist Mike Ward.

This has been fueled by the broadness of the space, which is seeing startups focus on everything from small molecule therapies, live microbial biotherapeutic products, bacteriophages, nutritional solutions, diagnostics, and biomarkers.

“In this very broad universe it attracts the attention of a range of industries who want to understand the field better and who want to be the first to know when something moves,” de La Fortelle said. “That’s where we are in a central position with Seventure; we talk to all these actors and we can give back a summary of non-confidential information to our limited partners.”

In the nutraceutical space, products claiming to affect the microbiota, or gut flora, are available and relatively abundant. But – while solid data is coming out from academia – the more regulated and potentially lucrative therapeutic biotech microbiome space is in its infancy.

“We will be in the pioneering phase until we get some really solid Phase 2B/Phase 3 results and the first Rx products arrive on the market,” he told us. “People are still searching [for] what are the good clinical strategies, what are the good go to market strategies. And this will take another maybe two three years until the pioneering phase gives way to products and value creation for either consumers or patients.”

Seventure’s first Health for Life Capital, set up in 2014 with the investment period finishing in the middle of last year, held €160 million. Several companies have exited, including MA-based developer of therapeutic nutrition for inborn errors of metabolism Cambrooke Therapeutics, sold to Ajinomoto Co. in November 2017. And earlier this year, Israeli bacteriophage firm BiomX entered a reverse merger with Chardan Healthcare Acquisition Corp (NYSE: CHAC). The firm has since begun construction of a clinical facility in Israel to make bacteriophages for inflammatory bowel disease (IBD) candidate BX002.

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