San Diego’s Avalon Ventures has pumped some $750 million into early-stage startups in both the life science and tech sectors since it was founded nearly 40 years ago.
Now, Avalon has spun out its biotech team into a new entity, Avalon BioVentures, that’s focused solely on investing in life-science startups. The new firm announced today that it has raised its first fund, totaling $135 million, from existing and new institutional investors to back young biotech companies.
“We had a really good run on the life science side over the past few years, and our limited partners were just excited about giving us a little more capital focused on life sciences,” said Jay Lichter, Ph.D. and managing partner of Avalon BioVentures. “This is the largest amount of capital we have ever had focused on life sciences in our history.”
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Avalon Ventures has raised 11 funds over the years. It was an early backer of game developer Zynga. But its near-term plans for investments in tech companies beyond its current portfolio firms remains unclear, particularly with the continued volatility in public markets, said Lichter.
“That certainly hasn’t helped the tech group,” he said. “They have had some great winners. I think it is more of an issue that investors don’t want to be forced to take on portfolio managers who are focused on two sectors.”
Avalon’s biotech track record includes backing more than 50 life science companies, including founding investments in Vertex Pharmaceuticals, Onyx Pharmaceuticals, Amira Pharmaceuticals and Neurocrine Biosciences.
More recently, it backed Synthorx, which was acquired by Sanofi in a deal valued at $2.5 billion. It also had stakes in Calporta, which was acquired by Merck for $576 million, and Janux Pharmaceuticals, which raised $194 million in a public stock offering last year.
Lichter said Avalon “is a San Diego story.” It operates an accelerator lab in Torrey Pines to help life science entrepreneurs vet their ideas. About two-thirds of its startups come out of universities and research institutes such as UC San Diego and the La Jolla Institute for Immunology.
Avalon BioVentures’ partners are Lichter, Tighe Reardon, Sanford (Sandy) Madigan and Sergio Duron.
“The team at Avalon BioVentures learned the Avalon method over decades of experience as founders and entrepreneurs in Avalon portfolio companies,” said Kevin Kinsella, founder of Avalon Ventures and emeritus partner at Avalon BioVentures, in a statement. “They bring significant knowledge in drug discovery, clinical development, company formation and operations that is critical to translating a scientific discovery into a novel therapeutic.”
Lichter said Avalon BioVentures has made investments from the new fund but declined to provide details.
“We are going to start new companies, new ideas, big ideas,” he said. “Some will fail, some will be OK and a few are going to be outstanding. That has been the history of Avalon.”
This content was originally published here.
