[Update #3] This is fast becoming perhaps my favorite post to update because it is the catalytic properties of the sometimes elusive to isolate GREEN enzyme that can enable so much good. That said, today’s new fund to report on, Mission Bay Capital (no website, yet…), though small in size, it is a seed fund after all, once fully funded and standing tall at $15M (you can take a look at the Reg D filing [HERE]), will play a large role in igniting innovation and addressing the ‘new’ classic early-stage entity issue of crossing the valley-of-death. The updated grand total of recently closed life science funds (enter drum roll here…) is now $2,190M in investable capital.

Though Mission Bay Capital Fund I is independent of the California Institute of Quantitative Biosciences (QB3) and the University of California System the focus is to make seed investments at an average of $500,000 in science and entities born out of the UC System which is designed to aid in the demonstration of proof-of-concept and or spark the formation of a broader investment syndicate. An interesting element of the fund is that it is engineered to return 20 percent of profits from the investments to populate subsequent Mission Bay Capital funds and to build an endowment for QB3, to support the institute’s research and educational mission. It is not exactly clear how this 20 percent is derived, e.g. out of carry, etc. nevertheless there is some time until liquidity to get a better handle on the distributions… The unique “mission” of the Fund is enabled via a diverse makeup of limited partners investing in the Fund, that is, in addition to the traditional for-profit LP participation there is also participation from philanthropic partners. Some of the identified LP’s include Pfizer (NYSE: PFE) and Wilson Sonsini Goodrich & Rosati Investments.

The Mission Bay Capital advisory committee is led by a gentlemen who knows a thing or two about early-stage bio investing, Brook Byers, of Kleiner Perkins Caufield & Byers, who in 1984 formed the first venture capital life sciences practice group which has invested in north of 100 medical, healthcare and biotechnology oriented entities, dozens of which have gone on to become public companies or were acquired and has created billions and billions in market value while bringing numerous products to market which have since served the medical needs of millions of people worldwide.

[Update #2] A bold call? Perhaps… As 2009 winds down with about ten weeks to go it sounds as if one should not be surprised that large stockpiles of cash move from the sideline, tighten the chinstrap and get in the game – from limited partners to funds to institutions – who move to deploy capital in both the private and public markets. In terms of new life science fund formation tack on to the total the latest entrant, courtesy of General Electric (NYSE: GE), the $250M GE Healthymagination Fund, bringing the grand total of recently closed life science funds to $2,175M $2,190M in investable capital.

The fund will target three broad areas of investment:

  • Diagnostics | including imaging, home health, patient monitoring, molecular diagnostics, pathology, novel imaging agents and other technologies for disease diagnosis.
  • Healthcare IT | including electronic medical records, clinical information systems, healthcare information exchanges and value-added data services.
  • Life Sciences | including tools for research and development in biopharmaceuticals and stem cells, and technologies for manufacturing of biopharmaceuticals and vaccines.

[Update #1] Add Domain Associates, Domain Partners, VIII $500M to the early-stage drug and device sectors; bringing recently closed funds up to $1,925M $2,175M $2,190M.

[Original Post] Recently Boston, MA-based Excel Venture Management announced the close of the new $125M Excel Medical Fund. The portfolio is a planned balance across healthcare IT and services, diagnostics, and medical devices, plus life science platforms that address adjacent markets which may include energy, chemicals, defense and agriculture. It is made unambiguously clear that single molecule drug companies need not apply – for such an approach is not of interest to their principals. Initial investments are in the $1M to $5M range and it appears at least five investments have been made to date, these include 1. Aileron Therapeutics (developing ‘Stapled Peptides’, a potential new therapeutic modality that may target a diverse spectrum of human disease) 2. BioTrove (providers of micro- and nano-scale technologies to the research and diagnostics markets) 3. Dormir (an integrated provider of sleep diagnostic services, therapy and equipment) 4. MedVentive (provider of healthcare IT business intelligence solutions) and 5. Synthetic Genomics (creating synthetic genomic solutions for the production of biochemicals, next generation biofuels and vaccines).

Additional life science funds that have closed within the last twelve months include Essex Woodlands Ventures $900M Fund VIII which invests across the spectrum of drug, device and service companies in North America, Europe and Asia, and Morgenthaler Ventures checked in with their $400M Fund IX, who in their press release indicated a continued focus on early-stage investing.

So sum it all up and approximately $1,425M $2,175M $2,190M in new early-stage life science capital is needing to be put to work and eventually returned at some hopeful market exceeding multiple to the fund’s limited and managing partners. What are you doing to make your entity “investable”?

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