Newton Biocapital heads for year-end close for second, EUR 150m life sciences fund

Newton Biocapital II has a target of EUR 150m and has so far received commitments of EUR 50m, they said in a joint interview on the sidelines of the BioEurope Spring event.

The fund primarily targets public and private institutional investors, and its current investors include pension funds, the sovereign wealth fund of Belgium (SFPI-FPIM) and the Development Bank of Japan, they said.

Newton Biocapital invests as a part of consortium, welcomes public-private partnerships and does not charge a management fee on its funds, they said.

Based in Tokyo and Brussels, the sponsor raised its first, EUR 113m fund in 2017, and it is now fully invested across a portfolio of 14 companies. Its second fund has backed two companies to date.

The VC firm has a competitive advantage through its team's strong knowledge of regulatory authorities both in the EU and Japan, which is an asset for developing and regulatory approval of potential treatments, the executives said.

Investment strategy
Newton aims to have 70% of its portfolio based in the EU and 30% in Japan, the executives said. It invests in biotech and medtech players with a focus on therapeutics and chronic diseases. It is not oriented towards any specific indications in its investments, preferring to focus on companies that develop treatments for diseases with high unmet need.

The fund invests in seed, Series A and Series B rounds with a focus on milestones, the executives said, adding that these milestones are evaluated based on science-based pre-clinical and clinical data, and are oriented towards value creation in terms of proof of concept and efficacy.

The fund tends to invest in later-stage companies in Japan, particularly Series B rounds, whereas its European investments that tend to be at earlier stages, such as seed and Series A rounds.

It provides tickets of up to EUR 11m and holds investments for five years, plus five more years after a follow-on investment.

Exit pipeline
The sponsor is focused on milestones in its exit strategy and is oriented towards trade sales to pharmaceutical companies once the clinical assets are ready for further development. It tends to exit companies that are at Phase 2b/Phase 3 stage of their clinical study.

Several of its portfolio companies have reached a stage where they are ready for a trade sale, they noted. These include French cardiovascular disease-focused biotech company Acticor Biotech; J-Pharma, a Japanese company developing cancer treatments; and Sequana Medical, a Belgian medical device company focused on liver disease treatment.

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