Novartis increases venture fund

Pharmaceuticals giant, Novartis, has pledged an extra CHF50 million (€35 million) to its Novartis Venture Fund, which now totals CHF300 million (€205 million). The additional capital will be used to make new investments as well as support the development of existing portfolio companies.

Novartis structured the investment vehicle as an evergreen fund, with exit proceeds being reinvested, but recent low returns meant it needed a top-up. Dr Jürg Meier, executive director of the fund, said the need for fresh capital is particularly pressing in the life sciences sector, as research companies need more financial support to get to breakeven. The fund also makes around 20 new investments each year. It invests globally in life sciences, biotech and therapeutics. The fund also provides investee companies with practical support and advice, helping with financial and business planning.

Founded in 1996, the fund has so far provided 117 start-up companies with loans and equity investments. It currently has 68 companies in its portfolio, a quarter of which are active in cancer research. Daniel Vasella, chairman and CEO of Novartis, said: “The activities of the Novartis Venture Fund are becoming increasingly important and making a significant contribution in their support of fledgling companies with innovative, pioneering technologies which meet the needs of patients.”

The Novartis Venture Fund is formed by three separate vehicles: The Spin-off Fund provides seed money to support Novartis employees who want to start their own business. The Start-up Fund makes seed and follow-on investments in companies mainly spun-out of European universities. It focuses on promoting scientific and technological innovation, based on intellectual property. The BioVenture Fund invests in product- and platform-focused biotech, pharmaceutical and healthcare, with an emphasis on the US. This $100 million fund makes investments of $0.5 million to $5 million.