Third Rock Ventures secures $616M in new biotech fund

Dive Brief:

  • Third Rock Ventures, a Boston-based venture capital firm focused on biotech investing, on Monday closed its fourth and largest fund, securing $616 million in an oversubscribed fundraising. 
  • To date, Third Rock has raised nearly $2 billion, which it has channeled into a broad portfolio of over 40 biotech companies. Twelve Third Rock-backed firms, including Bluebird Bio and Editas Medicine, have gone public.
  • Third Rock also reshuffled its leadership team. Abbie Celniker, former president and CEO of Eleven Biotherapeutics, joined as a partner while Charles Homcy, a co-founder of Portola Pharmaceuticals and previous Third Rock venture partner, was elevated to partner. 

Dive Insight:

While 2016 has seen some slowdown in biotech venture activity, investment continues to flow into the sector. 

Biotech companies attracted $3.6 billion in venture funding over the first six months of the year, spread across 224 deals, according to PricewaterhouseCooper's MoneyTree report. This represents a 6% drop in aggregate deal value and a 14% decline in total deal count compared to the same period last year.

Still, the biotech industry captured a larger share of overall life sciences venture funding in Q3, per PwC. In addition, measuring against 2015, a record year, disguises historically high levels of venture activity. 

Third Rock's new, oversubscribed fund demonstrates the continued interest in investing in high-quality biotech opportunities.

The firm has built a strong track record of success over the past decade and recent months have seen two notable M&A exits. Third-Rock backed Afferent Pharmaceuticals was acquired by Merck & Co. for $500 million upfront in June. And just last week Allergan snapped up Motus Therapeutics, another Third Rock funded biotech, for $200 million upfront. 

Notable portfolio companies also include the gene therapy pioneer Bluebird Bio and Editas Medicine, a leading company in the CRISPR space. 

Other high-profile biotech venture firms have been active as well. Sofinnova Ventures, which invests exclusively in life sciences companies, in August raised nearly $600 million for its latest fund. 

While overall numbers may have dipped slightly off of 2015's pace, Third Rock and Sofinnova's successful fundraising efforts point to the continued availability of capital for the biotech industry. 

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Filed Under: Drug Discovery Corporate News