- SR One, the former venture arm of GSK, has raised its second fund since spinning out of the pharmaceutical company, announcing Monday a new $600 million bankroll to invest in young biotechnology companies.
- As the biotech sector pulls back on initial public offerings, SR One is eyeing opportunities to get in at “more attractive” entry points for later-stage investments, though it will still invest in seed and Series A rounds, said CEO Simeon George.
- In 2020, SR One completed a $500 million fund that infused cash into emerging biotechnology companies such as Nimbus Therapeutics and MiroBio before their blockbuster deals, along with Arcellx before its Nasdaq debut.
SR One’s decision to become a standalone firm after serving as GSK’s venture arm for 35 years was what George described as a “win-win” for both entities.
GSK wanted to put more money into its drug pipeline. The investors at SR One, on the other hand, were itching to build their own portfolio.
Three years later, that split has paid off. SR One is now free to broaden the scope of its investments, while GSK shares in its successes by contributing to its fund.
Some of the firm’s bets have paid off handsomely, too. SR One supported Nimbus, for example, before the biotech sold an autoimmune drug to Takeda for $4 billion, and MiroBio prior to its acquisition by Gilead Sciences. It also invested in Arcellx, one of a short list of biotechs that have found IPO success over the last two years.
“It was, frankly, an amazing year for us,” George said. “It's really focused on those fundamental value creation points — show me that you have a drug that's actually treating patients. If you do that, even in the worst year that we've had in a number of years, you create value.”
SR One has already been putting its second fund to work. One of the beneficiaries was Mineralys Therapeutics, which raised $192 million in 2023’s largest IPO to date.
Going forward, George and his fellow investors are interested in product-focused and “platform” biotechs based on broader drugmaking technologies, he said.
The company was an early investor in the gene editing biotech CRISPR Therapeutics, and remains “excited” to do platform investments, he said. But George expressed a preference for more narrowly built platform companies that have a clear value proposition, a sentiment that’s become more common during the market’s pullback.
“There does need to be a thesis around where you can exemplify why this is the right modality to be able to derive a clinical benefit,” he said of investments in platforms.
One investment that’s currently in the works has roots in River Vision, a startup acquired by Horizon Therapeutics and a key reason Amgen recently agreed to buy the company for $28 billion. SR One was an investor in River Vision, and is working with the scientists behind the startup to develop two companies focused on kidney disease, he said.
The fundraise, meanwhile, adds to what’s been a record haul of late for venture capital investors. Venture firms raised about $163 billion in 2022 and put nearly $31 billion into biotech and pharma investments last year, according to the National Venture Capital Association.
Editor’s note: This story has been updated to clarify that SR One invested in River Vision, not Horizon Therapeutics.