Biotech venture capital isn’t what it used to be, but there’s still money to invest in healthcare. Now one biotech investment firm just starting out has found $100 million to plow into “late-stage” companies.
Foresite Capital Management, a San Francisco- and New York-based firm founded by Jim Tananbaum in 2011, said today it has officially pulled together $100 million for its Foresite Capital Fund I. The fund’s strategy, according to a statement, is to invest in “disruptive, late-stage products and services in a broad range of healthcare from biotechnology, genomics and diagnostics to healthcare services and medical devices.”
Foresite chose to highlight six current investments in today’s statement, four of which are public companies, while the two private companies have both completed Phase II clinical trials. Foresite singled out AcelRx Pharmaceuticals (NASDAQ: ACRX), Intarcia Therapeutics, Keryx Biopharmaceuticals (NASDAQ: KERX), Puma Biotechnology (NYSE: PBYI), Solta Medical (NASDAQ: SLTM), and Tarsa Therapeutics as model examples from its portfolio. As opposed to seed or early stage investments just starting out with lots of time, expense, and risk ahead of them, Foresite said it plans to focus on providing growth capital to help companies that are more established.
“We are marrying the best practices of growth investing with healthcare specialization,” Tananbaum said in a statement. “We are proud of our capital base, extremely excited about the prospects for healthcare growth, and believe on a risk-adjusted basis there has never been a better time to have this focus.”
Tananbaum, an MD and MBA, is a veteran of the biotech scene, and familiar with the time, expense, and risk that goes with starting something new. He was a co-founder and CEO of South San Francisco-based Theravance (NASDAQ: THRX), and then worked the last decade as a venture capitalist with Prospect Venture Partners. One of Tananbaum’s colleagues from Prospect, managing director Dorothy Margolskee, has joined him at Foresite.
Prospect, a well-known biotech venture firm that invested in everything from early to late-stage companies, told VentureWire in October 2011 that it was unable to reach its $250 million fundraising goal for a new fund.