Is anyone on this forum close to the growing life science investing world that seems to be coming out of traditional PE? Seems that Bain Capital started a fund that bridges the gap between biotech VC and the public markets, and BX soon followed suit with an acquisition of Clarus. Would love to get the perspective of anyone currently in this space as to what these entrances have done and where they see things going in the next few years in the life sciences
May 07, 2020
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Not many PE firms want to take on the risk of life sciences investing, especially since they ideally invest at later stages compared to VC where things get more expensive and you have less control over your investment (whether it goes well or not is up to the clinical trial of their lead assets). VC is still your best bet to get into life science investing. OrbiMed is one that comes to mind as being large enough to fund "PE" size investments whilst also doing earlier stage deals. Same with Abingworth Ventures.
Makes sense, which is why I was surprised to see Bain and BX entering the mix. Any thoughts on whether it's part of a broader trend of PE MFs entering the life science investing space? And do you think it will have an outsized impact on the life science industry?
I don't think so, I think it makes sense for some firms with broader offerings (like consulting and AM in this case) to do so because they can afford to have a VC arm. Why don't more companies do it? Not sure to be honest, I guess we just have to wait and see what happens in the industry
Interesting. Though I don't think it's accurate to call the Bain/BX funds "VC". See below for Bain. Looks like an interesting hybrid strategy.
https://www.baincapital.com/businesses/scaling-innovation-life-sciences
Yeah it's strange because it varies across the portfolio. For examples, they committed $350M with other funds and in partnership with Pfizer to make Cerevel Therapeutics but made a bread-and-butter $70M VC-style investment into Dicerna. I think that whilst there is some variety, most investments from PE funds in this space are more similar to VC-style ones. Perhaps larger, but still of that nature.
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