Forbion has expanded into late-stage biotech investing by holding the first close of a planned €250 million ($284 million) fund. The growth fund, which received money from Eil Lilly, will work with a who’s who of European biotech leaders to execute its investment strategy.
European VC shop Forbion made its name in early-stage biotech investing. Forbion helped found Dezima Pharma and supported it en route to a $300 million upfront takeover by Amgen. On other occasions, Forbion got involved at the series B stage, such as when it co-led an investment in Prexton Therapeutics shortly before the biotech was bought by Lundbeck for €100 million upfront.
Now, Forbion has followed fellow European VCs Medicxi and Sofinnova Partners in expanding beyond early-stage investing. Forbion unveiled its move into late-stage investing with the €185 million first close of a growth fund. The goal for the final close is €250 million.
Forbion will use the money to invest in eight to 12 companies that fall into three buckets. Some of the cash will go to private companies with “mature clinical development assets.” Another tranche is earmarked for private companies that plan to IPO soon. Forbion will use the rest of the fund to give “capital injections” to “existing, under-valued public companies.”
Sander Slootweg, managing partner at Forbion, thinks plenty of attractive European companies fall into those three buckets and currently struggle to access the capital they need to advance assets.
“The market for late-stage, private European life sciences investments is already sizable at €2 billion per annum and rapidly growing. Despite the de-risked nature of the late-stage clinical assets in these companies, this market segment is still underserved. As a result, many companies and assets stall in late-stage development, due to a lack of specific funding,” Slootweg said in the statement.
Other aspects of the strategy are similar to Forbion’s approach to early-stage investing. Forbion plans to take leading positions in the late-stage biotechs it backs, echoing its early-stage model, by making investments of up to €30 million.
In executing the growth fund strategy, Forbion will work with a newly established advisory group. The group includes Galapagos CEO Onno van de Stolpe, Genmab CEO Jan van de Winkel, Argenx CEO Tim van Hauwermeiren and Evotec CEO Werner Lanthaler.
Forbion began raising the fund in February, making it an early example of an investment vehicle put together during the height of COVID-19. Eli Lilly and Horizon Therapeutics, first-time investors in a Forbion fund, provided money, as did backers of the VC shop’s other funds including Pantheon, KfW Capital and the European Investment Fund. Forbion plans to close the growth fund at €250 million by the end of the year.