Biogen Idec VC Group Sees Opportunity in Tough Market, Has $100M New Allocation to Invest in Biotech Firms

12/12/08

It’s tough times for biotech entrepreneurs in search of new funds to launch startups, with early-stage investors conserving capital for their existing portfolio companies. Yet one venture group that isn’t hurting for capital nowadays is Biogen Idec New Ventures, the San Diego-based VC arm of big biotech company Biogen Idec (NASDAQ:BIIB).

Biogen this year committed an additional $100 million to its VC outfit, adding to the initial $100 million allocated to the group when it was formed in 2004, says John Dunn, executive vice president of New Ventures. The Biogen venture group also operates in Cambridge, MA, where Biogen is headquartered.

Dunn says the tough economic climate creates opportunities for New Ventures. “It would just seem obvious that because of the economic climate, traditional venture is pulling back a little bit, but companies still need the capital,” he told me . “The deal flow has never been a problem, but we see [inquiries from startups] increasing a little bit.”

While many traditional venture firms scale back on investment activities, New Ventures plans to invest at about the same pace as it has since 2004. Dunn says he expects to invest the new $100 million allocation from Biogen over a four-year period, give or take six months.

Dunn says his group, governed by a board of top Biogen executives, is authorized to invest up to $7.5 million in a single financing round and a total of $10 million in each portfolio company. He doesn’t like to talk about the 13 companies in his portfolio, keeping Biogen’s investment strategy close to the vest. But here are our descriptions of several of them in the Boston area and San Diego:

Hydra Biosciences — Cambridge, MA

Hydra aims to develop new drugs to home in on … Next Page »

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