European venture capital firm Sofinnova Partners has raised €472m, equivalent to $548m, to invest in life sciences startups, the latest in a series of healthcare funds the firm has closed recently.
Sofinnova, based in Paris, London and Milan, raised this latest fund, Sofinnova Capital X, to invest in early-stage biotechnology and medical-device companies. In July, Sofinnova said it had raised a €63m pool to launch medical-technology startups, and in March, it disclosed a €445m crossover fund targeting later-stage companies.
Sofinnova prefers to raise separate funds for early- and later-stage investments so that it can be nimble and assemble teams with specific experience in backing startups or mature companies, said Graziano Seghezzi, a managing partner with the firm, which also invests in North America.
A decade ago, capital for European life sciences startups was harder to come by, but these days Sofinnova is finding that funding for its companies is more readily available, Seghezzi said. European biotech startups, for example, secured $3.66bn in venture capital in the first half of this year, approaching the $4.6bn raised in all of 2020, and topping the $3.13bn companies collected in all of 2019, according to Silicon Valley Bank.
Other European life sciences venture investors have raised new investment pools recently, including Paris-based Jeito Capital, which said in September that it had raised €534m for its first fund.
Sofinnova’s team has seen several portfolio companies go public or be acquired recently. They include US biotech company Corvidia Therapeutics, a developer of a drug designed to reduce cardiovascular risks in chronic kidney-disease patients who have atherosclerotic cardiovascular disease and inflammation. Danish healthcare company Novo Nordisk acquired Corvidia last year for $725m cash, plus additional success-based payments that could raise the total to $2.1bn.
Sofinnova, founded in 1972, drew upon an established base of investors and added some new backers while rounding up this new early-stage fund. It began raising the fund six months ago and closed it in September, Seghezzi said. Sofinnova beat its fundraising goal of €350m and, through an agreement with the fund’s limited partners, also exceeded the upper limit of €450m it originally set for the pool, Seghezzi said.
Sofinnova plans to invest the new fund in 12 to 15 companies, with three-quarters of the deals in biotech, he said. Two themes it has been targeting are gene therapy, which uses a therapeutic gene to treat a disease, and cell therapy, in which living cells are used as disease treatments.
In early 2020, for example, Sofinnova provided €16m in Series A financing to Genespire, a Milan-based company developing gene therapies for genetic diseases, including inherited metabolic disorders.
Late last year, Sofinnova teamed up with Lightstone Ventures to lead a $42m Series A investment in Catamaran Bio, a Massachusetts-based startup devising cellular immunotherapies with potential to treat solid tumours and other cancers.
