New Funds: OrbiMed Pools P.E. Investments, Launches Fund –

OrbiMed Advisors LLC, a team of investment advisors, this month launched a new fund dedicated to centralizing its private investments and pursuing new investments focusing on developments in the fields of biotechnology and pharmaceutical technology. Fund raising for Caduceus Private Investments LP began three weeks ago and will have its first close on July 31, 2000. The fund has a target of $150 million and a cap of $200 million.

According to an OrbiMed statement, the fund will invest from $3 million to $12 million mainly in private companies in the mezzanine-stage, focused on developing therapeutic drugs and advanced drug discovery platforms. The fund will employ the traditional 80/20 carried-interest split.

Samuel Isaly, a partner at OrbiMed, said the firm will be investing predominantly in the U.S. but will remain alert to opportunities anywhere in the world. The investors will be made up of traditional institutional investors such as endowments and pension funds.

OrbiMed, parent of the Caduceus Capital funds, currently manages four other funds: Eaton Vance Worldwide Health Sciences Fund, a mutual fund, Paine Webber Eucalyptus Fund, a hedge fund, PHARMA/wHEALTH, a mutual fund run out of Switzerland, and Finsbury Worldwide Pharmaceutical Trust, a closed-end fund traded on the London exchange. Caduceus Private Investments will centralize all the private investments made with these funds in the past eight years forming a single entity.

OrbiMed is a New York-based firm with total assets exceeding $1 billion. Generally investing in listed securities, OrbiMed made its first private investment in 1993. Its five funds have since invested $75 million cumulatively in approximately 25 transactions. “We draw upon our contacts with companies in the public market to understand what those companies want from private companies,” Isaly said. “We can follow our investments in companies [that are] in the private stage into the public stage. So as a group, we are not required to terminally exit these companies at public offering.”

The Caduceus fund’s key managers will be OrbiMed partners Samuel Isaly, Michael Sheffery, Carl Gordon, and Sven Borho. In a statement Isaly said, “We believe it is particularly timely to be investing now in later-stage biotechnology and pharmaceutical companies . . . The pace of technological advance is rapid, the need for funding is great and prospective rates of return are excellent.”

OrbiMed has added three professionals for this endeavor. The placement agent for the fund is Far Hills Group LLC.