Merlin Biosciences, the UK-based VC firm, has strengthened its presence in Germany and has entered into a strategic collaboration with German life science advisory group, BioConnect AG, based in Frankfurt and Munich. Plans for a new fund are also in the pipeline.
Merlin is acquiring a significant stake in BioConnect, the details of which have not been disclosed. The firm will enter into an investment advisory agreement to support its investment activities in continental Europe, particularly in the German-speaking nations.
BioConnect is a specialist investment and strategic consulting group, focusing exclusively on the life sciences. The team comprises six professionals, with over 45 years’ combined experience in life sciences. In its capacity as investment advisor, BioConnect is currently responsible for a portfolio of six companies, Cardion, Wilex, VitaResc, EpiCept, P.A.L.M. and 20/10 Perfect Vision.
Klaus Nester, CEO of Bioconnect, said: “We have seen a constantly increasing deal flow in Germany and other major markets on the continent. Working with Merlin Biosciences enables us to take advantage of the most promising investment opportunities.”
As part of the agreement, Merlin’s managing director, Mark Clement will be appointed chairman of BioConnect. With this collaboration, he says, Merlin has secured a permanent presence in the strongest European life sciences countries, namely the UK and Germany. He said: “We have been working closely with BioConnect over the past year and we are convinced that its approach and capabilities are highly complementary to Merlin’s.” He added: “What we need are people in Germany who have cultural experience. With our UK base and this agreement in Germany, we now have a strong foothold on the biotech market – about 70% of biotech opportunity in Europe is spread between the UK and Germany.”
Clement is also keen to keep an eye on the French market and is looking with particular interest at opportunities in Scandinavia. The next region Merlin will be targeting, he says is Southern Europe. “We will definitely be considering Spain and Italy in the future. Both regions have centres of excellence in Barcelona and Milan. The challenge however comes when looking for quality management teams.”
There are plans for a new fund, with a €300 million target, but it is still early days and it will be a challenge. “It is a good time to be investing, but realistically it is a tough market for raising capital. We are still a young team, but we have had very strong support and endorsement for the approach we are taking,” said Clement.