Almost 18 months ago, Domain Associates and the Russian state technology firm Rusnano agreed to jointly invest as much as $760 million in life sciences deals in the U.S. and Russia. Yesterday, the partners said they have completed their fifth deal—joining a $55 million equity round in ReVision Optics, a Lake Forest, CA-ophthalmic company.
ReVision, founded in 1996 as IntraLens Vision, has been developing a corneal inlay (now in late-stage clinical trials) to improve presbyopia, the age-related loss of near-sighted vision.
Domain, the life sciences venture firm based in San Diego and Princeton, NJ, would not specify how much capital it put into the deal. Domain and the Rusnano subsidiary RusnanoMednvest joined existing investors Canaan Partners, ProQuest Investments, InterWest Partners, and a new investor, Johnson & Johnson Development Corp. in the $55-million round.
To Domain partner Brian Dovey, though, the ReVision investment is the latest example in a series of promising initiatives that Domain and Russnano have engineered since March, 2012. In the statement, Dovey is quoted saying, “Put simply, this investment partnership is delivering results.”
“To get the deal done at all, with the 11-hour time difference, different legal systems, and different ways of doing business, is kind of a testament to both sides working to really make this work,” Dovey told me by phone yesterday.
“In our first year of working together Domain, Rusnano, and other investors have teamed up to deploy $173 million in capital, which includes a significant contribution by Rusnano, to support five [Domain portfolio] companies that are developing advanced treatments for ailments as diverse as foot ulcers, epilepsy and near vision loss,” Dovey added.
In addition to ReVision Optics, Domain and Rusnano also have invested in:
—CoDa Therapeutics, a specialized pharmaceutical based in San Diego, is developing new therapeutics for wound care, including the treatment of diabetic foot ulcers and venous leg ulcers.
—Lithera, an aesthetic medicine and ophthalmology company also based in San Diego, has been developing an injectable formulation of salmeterol xinafoate that has been optimized to reduce abdominal fat in normal, healthy people who are under 45.
—Marinus Pharmaceuticals, a specialty pharmaceutical company in Branford, CT, is developing neurosteroids for central nervous system disorders. The company’s lead drug candidate is a first-in-class therapy for epilepsy.
—Regado Biosciences, a specialized pharmaceutical in Basking Ridge, NJ, has been developing an anticoagulant for use in cardiovascular surgeries that could be used by surgeons to adjust bleeding risks.
At the same time, Rusnano and Domain plan to begin construction this year on another joint venture—an $85 million facility in Kaluga, about 93 miles southwest of Moscow, to manufacture medical devices and pharmaceutical products for the Russian market. The project under development by NovaMedica, a Russian business co-owned by Domain and Rusnano, represents a central element in a strategy adopted by the Russian government to produce at least half of the medicine within mother Russia by the end of the decade.
NovaMedica already has licensing agreements with Marinus, Lithera, Coda, and Regado to produce products in Russia, according to an In-Pharma Technologist report yesterday. Dovey says NovaMedica also plans to find additional health sciences products beyond Domain’s portfolio companies to develop and market in Russia. “We have two or three other deals pending, but none have closed yet,” Dovey said.
On another front, New Jersey’s Regado Biosciences plans to raise $75 million needed to fund a huge, late-stage trial of its anticoagulant with more than 13,000 patients. The company set a range between $14 to $16 a share in May, and has appeared this month on Renaissance Capital’s list of upcoming IPOs. The 30-employee biotech would command a market value of $219 million at $15 a share, the midpoint of its proposed range. Regado plans to trade on the Nasdaq exchange under the ticker symbol RGDO.
During our interview, Dovey emphasized that Domain’s wide-ranging partnership with Rusnano wasn’t easy to pull off.
“We spent two years in negotiations,” Dovey said. “It was not really contentious, but imagine working with a government that is accustomed to operating on a one-year business cycle, and getting them to operate on [a schedule] that is more like a 90-day cycle.”
He adds that venture investing in life sciences “is always about innovative products, but innovations in business models are just as important these days.”
In this respect, Dovey said Domain’s deal with Rusnano provides a crucial source of additional funding as well as other resources. “We can move the companies ahead further,” which helps to validate the value of new technology, whether it’s a medical device or biotech startup. “Big Pharma is willing to pay almost disproportionately for de-risked assets,” Dovey said.
So when will Dovey know that Domain’s Russian gambit has been successful?
“I guess success is in the eye of the beholder,” he replied. “I’d like to see us get on the market with some products at NovaMedica.” A moment later he added, “I’d like to see another four or five companies get funded. We just need to keep working on it.”