HBM Bioventures, the Swiss biotech investor, has launched its second fund. Silvano Cominelli, a partner at the firm, said HBM hopes to be half way towards the €200 million target by year-end with a final close anticipated in the first half of 2003.
The fund will invest between a quarter and a third of its total volume each in spin-offs, later stage situations and early stage companies. It is a limited partnership that will co-invest alongside HBM Bioventures’ first fund, which raised €500 million last year. Unlike the second fund, the first can invest up to a third of its capital in public equities. It is currently about 50 per cent invested in companies such as drug discovery company Axxima and Roche spin-off Basilea. It has also made commitments to a number of specialised biotech venture capital funds in the US and Europe.
Cominelli said the reason HBM decided its second fund should focus on later stage and spin-off investments was the attractive valuations and the lack of other credible lead investors in that space. The average investment size for the second fund will be around €15 million, with the first fund participating an equal amount in co-investments. The geographical split of portfolio companies will be 50:50 between the US and Europe. According to Cominelli between 50 per cent and 75 per cent of the fund’s investment are likely to be in biopharmaceutical companies, 15 per cent to 25 per cent in technology platforms and 10 per cent to 20 per cent in diagnostics.
All of HBM Bioventures investments are in biotechnology with an emphasis on emerging pharmaceuticals, medical technology and related industries. The group was founded by Henri B Meier, previously chief financial officer of Roche. Unlike other venture capitalists, HBM Bioventures intends to invest in some successful companies beyond an IPO.