By Mark Terry, BioSpace.com Breaking News Staff
Versant Ventures closed on its newest fund, Versant Venture Capital VI, with $400 million it plans to invest in 20 to 25 biotechnology companies in the U.S., Canada and Europe. The first investment is expected in the first quarter of this year.
“We are grateful to work with such high-quality limited partners who have demonstrated their commitment to and belief in our strategy, team and the overall potential of the healthcare sector,” said Brad Bolzon, Versant’s managing director, in a statement. “Versant has enjoyed unprecedented deal flow and outlier returns in recent years, and we believe we are well-positioned for continued success in both North America and Europe.”
Versant notes that its strategy has shifted toward biotechnology. Recent acquisitions and initial public offerings (IPO) in North America and Europe include Quanticel, Novira, Okairos, Clovis (CLVS), CRISPR, Audentes, GenSight and others.
John Carroll, writing for Endpoints News, says, “Versant likes to work in places where other venture groups are reluctant to follow. That’s one of the reasons why the VC has been particularly active in Canada. But the venture team also has extensive connections in Europe, another region that has been traditionally underserved by investors.”
Versant’s original goal for Fund IV was $350 million. Its previous fund, Fund V, hit $305 million.
Versant has three internal discovery engines and collaborations with various academic institutions and pharma partners. At the moment, its discovery engines host more than 80 researchers that include Blueline Bioscience in Toronto, Highline Therapeutics in New York, and Inception Sciences in San Diego, Vancouver and Montreal.
About 33 percent of investments from Fund IV are expected to come from the discovery engines.
“We’ve grown the discovery engine network from a single San Diego facility in 2011 to five fully operating research sites that cover the West Coast, Northeast and Canada, and will soon extend to Europe,” said Bolzon in a statement. “As a result of this expansion, we are better enabled to invest in breakthrough academic discoveries that can be translated into life-changing therapies for patients.”
Bolzon told Carroll that one of the reasons to invest “off the beaten track” has to do with competitive pricing. “Valuations inflate when there’s competition for deals,” Bolzon said. “And the competition is most fierce in the Bay Area and Boston. We’re taking a different tack,” while still remaining in those two locations. “Clearly we recognize that you can’t depend on the IPO window. It’s a cyclical phenomenon.”
Overall, Versant has more than $2 billion it manages. The managing directors for Fund VI are Bolzon, Jerel Davis, Kirk Nielsen, Tom Wolwode and Robin Praeger.
“We are very pleased with how effectively Versant has transformed a very differentiated investment strategy into a strong portfolio that is delivering top-tier financial performance,” said Cedric Bisson, partner at Teralys and chairman of the Versant Limited Partner Advisory Committee, in a statement.
It was only early December 2016 when Versant launched BlueRock Therapeutics with Germany-based Bayer AG (BAYZF). They ponied up joint funding of $225 million. BlueRock will focus on stem cell research to regenerate heart muscles after a heart attack, and to develop therapies for Parkinson’s disease. The startup licensed intellectual property regarding foundational stem cells from Nobel Prize winning scientist Shinya Yamanaka at Kyoto University.