Abingworth closes maiden co-development fund on $105m

Abingworth Clinical Co-Development Fund (ACCF) hit the road with a $100m target last July. The process was overseen by placement agent Asante Capital, which has also worked on previous Abingworth fundraises.

Reportedly oversubscribed, ACCF represents a change of strategy for Abingworth, moving away from direct VC financing and into investments in co-development companies that fund late-stage clinical trials for big pharma clients.

Since inception, the VC has inked seven of these deals - representing 30% of its assets as of late January - but ACCF is the firm's first fund to exclusively focus on the approach. 

The vehicle is the 11th to be raised by Abingworth and comes six months after the VC completed a succession plan, replacing former head Stephen Bunting with co-managing partners Tim Haines and Kurt von Emster.

The firm, which added Shelley Chu to the partnership last October, is currently investing from its sixth venture fund; the vehicle broke its £200m target when it closed on £225m in February 2014.

Investors
ACCF's institutional-only LP base includes the European Investment Fund, funds-of-funds and family offices, among others. Abingworth's newest fund sparked interest from both existing backers and new investors.

"We attracted LPs with a different risk profile as ACCF's strategy differs from our standard VC funds. There is currently uncertainty around public markets and these assets are unconnected to the stock exchange, which decreases risk," Abingworth managing partner Tim Haines told unquote". "In addition, even before we go into a deal, we've got information about discussions with regulators so we that can establish a timeline for when the therapy will get approved, which makes it easier to predefine exit terms and have more certainty around these returns."

According to Haines, the strategy has so far proved profitable, at least for ACCF's first deal. As holding periods are shorter on average, IRR tends to be higher, while multiples compare to those scored by Abingworth through its standard VC funds, he added. 

Investments
ACCF will deploy capital via clinical co-development companies SFJ Pharmaceuticals and Avillion, targeting the US and European markets, respectively. Both structures will receive mandates from big pharma to run late-stage trials and assume the clinical and regulatory risks that come with the tests; once the drug gets regulatory go-ahead, a pre-agreed return is generated for the co-development company.

ACCF, which will co-invest alongside Abingworth's existing vehicles, will look to land five to six of these deals within the next three years. With a $15-20m typical equity ticket, the fund will seek opportunities both in the US and Europe and has already inked a maiden deal in the former; the VC expects to add more deals before year-end, according to Haines.

People
Abingworth Management – Kurt von Emster, Tim Haines (managing partners).

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