TVM Life Sciences Fund Busts Target

Despite a wealth of obstacles, including the slumping economy, a significant drop-off in venture capital investing and the Sept. 11 terrorist attacks, Techno Venture Management (TVM) yesterday announced that it has closed its fifth life sciences fund with E336 million ($296.11 million).

Originally targeted at E250 million, TVM V Life Science Ventures was greatly oversubscribed. The early-stage venture firm solicited E150 million worth of commitments from existing investors, with the remainder coming from a cadre of new limited partners.

While the firm is still calculating the exact breakdown, approximately 90% of the commitments came from German and Swiss LPs, while the remaining 10% trickled in from investors in the U.S. and Singapore, said Dr. Helmut Schuhsler, a Munich-based managing partner who oversees life sciences investments for the firm.

“We talked to a number of U.S. investors, but the events of the last two or three months have prohibited many from making investments in any fund,” Schuhsler said.

TVM V?s largest contributors include NIB Capital of the Netherlands; Technologie-Beteiligungs-Gesellschaft, a subsidiary of Deutsche Ausgleichsbank; KfW (Kreditanstalt fur Wiederaufbau) of Germany; Switzerland?s Winterthur Life & Pensions; GIC of Singapore; and Germany-based Allianz Private Equity Partners.

TVM V will invest throughout Europe, with a specific focus on Germany, Switzerland, Austria and the United Kingdom. The cross-border venture firm, which has offices in San Francisco, Munich and Boston, also will invest in the U.S.

In fact, the firm specializes in creating trans-Atlantic portfolio plays. “We will often create German portfolio companies with a U.S. subsidiary, or U.S. portfolio companies with a German subsidiary, for example,” Schuhsler explained. “It allows us to enjoy access to capital, management talent, science and many other good things on both sides of the Atlantic.”

Fund V will not stray from the strategic path of its predecessors and, as such, will invest primarily in drug development companies and platform technologies that enhance drug discovery and delivery.

Since its E70 million (approx. $60.62 million) first close in May, TVM V has sealed seven deals in Germany and the U.S., including financings for Axxima Pharmaceuticals AG, DeveloGen AG, Genicon Sciences Corp., Jerini AG, Merix Bioscience Inc., Novirio Pharmaceuticals Inc. and Precision Therapeutics Inc.

TVM has several additional transactions currently in the works, and Schuhsler said he expects those to close within the next two to three months. He declined to provide any further details about the deals, however.

Sister Fund Still Being Raised

TVM launched its fifth life sciences fund in conjunction with an information technology offering back in February. That fund, TVM V IT, is expected to conclude fund-raising in the first or second quarter of next year. Schuhsler reported that fund-raising is going well for TVM?s IT group. He would not comment on how much the fund has raised thus far, however, citing Securities and Exchange Commission restrictions.

Still, there is plenty of dry powder left in TVM IT IV, as the firm slowed its investment efforts in the sector in late 2000 and early 2001 because it believed such companies were over-priced, Schuhsler said.

As such, the remaining reserves in Fund IV should sustain TVM?s IT investment team well into next year, he added.

Robyn Kurdek can be contacted at: Robyn.Kurdek@tfn.com

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