Sofinnova Crossover Fund closes on €445m

Alessia Argentieri
03 March 2021

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Life-sciences-focused venture capital firm Sofinnova Partners has held a final close for its first Sofinnova Crossover Fund on тЌ445m.

The fund was initially launched with a target of around €250m and held an oversubscribed first close on €278.5m in December 2018. Sofinnova then decided to substantially increase the fund size, bringing it to €400m.

"The Sofinnova Crossover Fund is dedicated to investments in later-stage biotech companies that have already achieved proof of concept and need financial support to reach the next stage of their development," Antoine Papiernik, chair and managing partner of Sofinnova, told Unquote.

He added: "In addition to this fund, we have a large array of products and a team of 50 professionals able to cover the entire value chain of biotech investments, from early-stage company creation to the very end of the cycle, where companies are ready for an IPO or a trade sale."

Triago acted as placement agent and Clifford Chance as legal adviser on the fundraising.

Sofinnova is a venture capital house specialising in life sciences, with a focus on biopharmaceuticals, medical devices and industrial biotechnology. Headquartered in Paris, with further offices in Milan and London, Sofinnova is fully owned by its managing partners and has more than €2bn in assets under management.

Investors
Sofinnova Crossover Fund I attracted commitments from a base of around 30-40 LPs, including 12 large international institutions, primarily pension funds, funds-of-funds and sovereign wealth funds.

Papiernik said: "Biotech has been the superhero of the pandemic. Everyone has finally realised the importance of this industry and investors have started to pour increasing capital into the sector, not only in the US but also across Europe."

The LP base also comprises institutional investors from France, including BPI France, several pension funds and various insurance companies. In addition, it includes some French and international family offices.

The majority of the fund's LPs are from Europe, a significant portion from the Middle East and Asia, and a minority from the US.

"In our final close we were able to bring in several key French institutions and pension funds," Papiernik told Unquote. "We have noticed that there has been a positive evolution in investment mentality for many French institutional investors, which are now able to recognise the value of investing in the biotech sector."

Investments
Sofinnova Crossover Fund I is dedicated to late-stage rounds in biopharma and medtech businesses, and deploys equity tickets of €15-40m per company, with a sweet spot in the €25-30m range.

"Thanks to our successful fundraising, we will be able to deploy larger tickets to support our target companies, and fuel their development and international expansion," said Papiernik. "We plan to use this capital both to boost the growth of our current portfolio with additional investments and look for some new opportunities that meet our criteria."

The vehicle intends to deploy around 70-80% of its capital across Europe, while the remainder can be invested in strategic opportunities across the US market.

The fund has already backed 10 companies that address unmet clinical needs. It plans to make 10 more deals, building a portfolio of around 20 assets, Papiernik told Unquote.

"Our initial portfolio has demonstrated outstanding progress, with the majority of our investments reaching positive clinical trial milestones and raising large financing rounds. Two of our European companies, Calliditas Therapeutics and Inventiva, have also listed on the Nasdaq with successful IPOs," said Papiernik.

Looking at the coming months, the fund has a strong pipeline of possible investments and is currently working on a deal for a European company active in the oncology sector; the transaction is expected to be inked in the coming weeks.

"We expect dynamic activity in the coming months across a variety of sub-sectors, including CNS diseases, oncology and orphan indications, as well as new technologies such as gene therapies and RNA vaccines," said Papiernik.

People
Sofinnova Partners – Antoine Papiernik (chair, managing partner); Cédric Moreau (partner).