MPM Capital Sells Coelacanth –

Global health-care investment firm MPM Capital has sold portfolio company Coelacanth Corp. to Lexicon Genetics for $32 million.

The Cambridge, Mass.-based private equity firm made its original investment in Coelacanth just over two years ago from its first fund, the $230 million BioVentures I, which it raised in 1997. That fund is now fully committed with 80% of the investments in biotechnology and 20% in medical devices and e-health.

Coelacanth Corp., based in Princeton, New Jersey, was founded in 1996. The company uses a proprietary technology it calls ClickChem to create sets of building blocks that are used for the production of combinatorial chemistry libraries said to shorten lead discovery and lead optimization time for drug development. These libraries are then offered for sale to pharmaceutical companies. To date, Coelacanth has 16 pharmaceutical and biotechnology company customers. Coelacanth will become a new division of Lexicon and gain a new name, Lexicon Pharmaceuticals.

“It was a good offer and a perfect fit,” said Michael Steinmetz, a general partner with MPM Capital, regarding the acquisition by Lexicon. He said the company had come to a crossroads and needed to decide whether to seek more private funding or alternative options when it came across the offer from Lexicon. Lexicon Genetics is a drug development company based out of Woodlands, Texas.

Steinmetz said his firm met its goals over the ownership period, but declined to state IRR or other specifics. He did say that the “technology and people” were what originally attracted MPM Capital to invest in Coelacanth.

“We completed the management team, added to the technology platform and increased revenue considerably,” he said.