Corporate Life Sciences VCs on the Rise in New England—the List

9/3/08

Some of the most exclusive clubs in the Boston area aren’t actually clubs at all, they are venture capital firms, where partners hold the power to turn ideas into companies—and make themselves a lot of money in the process. So perhaps it’s not surprising that some big companies would want to get in on the act as well. Nowhere does this seem to be the case more than in life sciences, where a variety of firms have set up venture arms in recent years to invest in ideas that might help fill their diminishing pipelines.

The ranks of Boston area life sciences companies with venture capital divisions grew last week with the launch of Covidien Ventures, the offspring of medical technology giant Covidien (NYSE:COV), based in Mansfield, MA. Then a few days ago we learned that a tandem of local life sciences corporate VCs— Genzyme Ventures and the Novartis Option Fund—were among the investors in a $45 million Series A round for newly hatched biotech startup Proteostasis Therapeutics of Cambridge.

Given this recent activity in the corporate VC arena, now seemed an appropriate time to list all the players we could identify in the Boston area. This list doesn’t include local corporate VC firms with single limited partners, such as Fidelity Biosciences and Navigator Technology Ventures. I also trimmed corporate VC groups located outside New England, which eliminates some big players such as Amgen Ventures, GlaxoSmithKline‘s (NYSE:GSK) SR One and J&J Development. Still, what remains is an impressive roster of outfits with literally billions of dollars at their collective disposal. (As always, let me know if I’ve missed any groups that should be on this list.)

Here they are:

Biogen New Ventures — Cambridge, MA and San Diego, CA
Corporate parent: Biogen Idec
Fund size: $100 million
Description: Biogen’s (NASDAQ:BIIB) venture capital fund, established in 2004, makes million initial investments of $5 million to $10 in biotech startups with science that complements its focus on the cardiovascular, immunology, oncology, neurology, and rheumatology markets. Perhaps to his chagrin, activist Biogen shareholder Carl Icahn has no influence—of which I am aware—on how this fund spends money.

Covidien Ventures — Mansfield, MA
Corporate parent: Covidien (formerly Tyco Healthcare)
Fund size: no fund allotment
Description: Even though fund head Dan Sheehan has been making the rounds in the Boston area for months, Covidien Ventures only debuted last week. It has no set fund, but proposes to invest up to $5 million in each round of financing of its portfolio companies; it’ll be interesting to see where the firm makes its first bet. … Next Page »

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