Venture capital group Fountain Healthcare has raised €85 million in a second fund to drive investment in Europe's life sciences sector.
Ireland’s largest dedicated life sciences venture capital group now has €158 million under management and is looking for additional investors to bring the amount in this new fund up to €125 million.
The Fountain Healthcare Partners Fund II fund will focus on investment in the areas of specialty pharmaceuticals, biotechnology, medical devices and diagnostics.
The group intends to invest more than three-quarters of the money in Europe, with the balance looking at opportunities in the United States.
Managing partner Manus Rogan said the Fund II had already exceeded its initial target and had sourced most of the money from major domestic and international institutional investors as well as a strategic corporate investor. Enterprise Ireland is understood to be one of the parties to invest in the fund.
Fountain said it expects to use the money to invest in between 10 and 15 companies across the sector and has already completed two deals with the new money.
These are with Chrono Therapeutics, a US company that has developed a digital transdermal technology that is being applied initially to nicotine replacement therapy and Innocoll, a specialty pharma company which is developing products to treat post-operative pain, diabetic foot infections and surgical adhesions.
Dr Rogan, a founder of Fountain, said the company had delivered “strong absolute and relative returns” with its first fund since setting up the business in 2008.
“The performance of our first fund is reflected in both the level and quality of new and existing investor participation in Fund II. With €85 million raised we are also pleased to have exceeded our initial close target of €75 million against a widely accepted challenging fundraising backdrop in the venture capital sector.”
Aidan King, a fellow managing partner and founder at the group noted that life sciences had been one of the best performing investment sectors in the past two years with returns surpassing the major global indices and a record number of IPOs and public offerings.
“Strong demand for life science investments is a reflection of investor’s belief in the underlying growth dynamics of the sector and the investment return opportunities presented by innovative life science companies,” he said.
Dr Rogan and Mr King founded Fountain with Dr Ena Prosser and Justin Lynch. Apart from Mr Lynch, who is chief financial officer of the company, all previously worked with Irish pharma group Elan
Fountain is already invested in a range of companies from back pain medical device specialists Mainstay Medical to Genable, which is using gene therapy to address a particular form of inherited blindness.