Atlas Venture has been spending a lot of time lately figuring out how to create new drugs, and new companies, in untraditional ways—and it is showing the results of its strategizing again today through a new partnership with Shire Human Genetic Therapies.
Cambridge,MA-based Atlas said it has formed a multi-year collaboration with Shire to look for opportunities to invest in startups working on rare diseases. Shire, one of the world’s largest players in this field, will contribute by having its scientists conduct experiments to validate some of the scientific claims Atlas would like to test, and it will invest alongside Atlas in new companies, Atlas partner Bruce Booth said on his Life Sci VC blog.
Financial terms of the deal aren’t being disclosed. But Booth said that it will involve “dedicated professionals” working on structuring the new opportunities, and that Atlas and Shire will seek to create a small portfolio of investments over the years of the partnership. Shire will also get option rights in these deals, through which it will have the opportunity to acquire the companies at a pre-determined price if the startups reach certain scientific goals. This isn’t the first time Atlas has collaborated closely with a big company—earlier this year it formed an alliance with ag biotech giant Monsanto.
It’s all part of a push by Atlas, and other venture firms, to find ways to reduce the amount of time and money that goes into biotech startups, while increasing the odds they can get returns during a lackluster IPO market.
By structuring the investments to give Shire the option to acquire, the partnership “secures access to these innovations for Shire, while mitigating the downstream liquidity risk for the team and investors,” Booth said on his blog. Referring to the Shire and Monsanto deals, Booth said, “We are quite excited about how these unique platforms will enable us to further experiment with the early stage venture model.”
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