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Two Venture Funds Unveiled for Science Start-Ups

Investment graphic

(Gerd Altmann, Pixabay)

3 May 2022. Two investment companies announced venture capital funds totaling nearly $700 million for supporting new life science and health technology businesses. Catalio Capital Management in New York says it raised $381 million for its third Nexus venture fund, while health care investor Patient Square Capital in Menlo Park, California is spinning off Enavate Sciences, a separate enterprise with $300 million to support companies creating therapies and related technologies.

Catalio Capital Management is a two year-old investment firm that backs life science start-ups from seed to growth stages and exits. The company says it finances developers of drugs, medical devices, diagnostics, and data technologies for science-based enterprises. Catalio says its Nexus Fund 3 raised $381 million, exceeding its $300 million goal, with contributions from current investors, as well as institutional investors, foundations, and endowments worldwide. The company says its Nexus Funds 1 and 2 raised $15 million and $100 million respectively.

Catalio says many of its Nexus fund investments go to companies in which it forms partnerships with scientist-entrepreneurs at university research labs. The company says it already invested in 36 such partnerships with entrepreneurial researchers at institutions in the U.S. and Europe, out of a total of 45 investments since beginning in 2020. Science & Enterprise reported on four of those companies since March 2021:

eGenesis in Cambridge, Massachusetts, spun-off from the lab of Harvard University geneticist George Church, preparing genetically-edited pigs to produce organs for human transplantation

Volastra Therapeutics in New York, derived from research at Weill Cornell medical school collaborating with Microsoft Corp. on computational tools to find and predict factors that cause cancers to spread

Neumora Therapeutics in Watertown, Massachusetts, founded by researchers in neuroscience at the Broad Institute and Johns Hopkins University, developing more precise therapies for psychiatric and neurodegenerative diseases based on genetics and data science

Septerna Inc. in South San Francisco, based on research at Duke University and Monash University in Australia, designing proteins in the lab for difficult drug targets in a range of diseases

Business building and investment capital

Catalio says seven of its portfolio companies have already issued IPOs or were acquired. “Our pipeline across the biotech and life sciences space is as robust as ever,” says Diamantis Xylas, the company’s head of research in a statement released through BusinessWire, “and we look forward to continuing to back exceptional scientist-entrepreneurs and identify attractive investments that deliver treatment options to patients in need and drive returns for our investors.”

Enavate Sciences is a spin-off enterprise from health care investment company Patient Square Capital, where the company says the word “patient” refers to the focus of its investments and its approach to investing. Patient Square says it formed Enavate Sciences to invest in developers of therapies and biomedical technologies outside its usual model, where life science start-ups need help building their businesses as well as investment capital.

Patient Square says it contributed $300 million to get Enavate Sciences started. “We are in the golden age of therapeutics,” says Enavate Sciences CEO James Boylan in a company statement, “where the science has never been better understood and the tools to target disease, engineer therapies, and deliver drugs to patients with precision have never been more powerful. Yet current financial market dynamics have created significant challenges for therapeutic companies to raise the necessary capital to advance their pipelines.”

As reported by Science & Enterprise, venture capital investments are down worldwide in the first quarter of 2022, with fewer investment deals in U.S. biotechnology and pharmaceutical start-ups, although total investment dollars remain on track from last year.

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