HealthQuest Capital Raises $110M for Debut Fund with Medtech Focus

8/19/14Follow @bvbigelow

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new drug therapies for Sofinnova.

HealthQuest intends to target areas where there are clear unmet clinical needs for innovation as well as undercapitalized geographies. “A lot of these companies are quite capital efficient,” Kong said. “The deal sets are equally likely to be spread across the country as they are to be in the Bay Area or Boston. We’re open-minded about where these companies can be and need to be formed. If your business is focused on hospitals, you’re likely to be in Nashville, TN. If you’re focused on orthopedics, you’re probably in Warsaw, IN.”

The fund was created last fall and has invested in the following companies:

—Orlando, FL-based Vestagen Technical Textiles, which specializes in fabrics and apparel for healthcare workers that are comfortable, designed to repel liquids, and engineered with anti-microbial properties to minimize the chances of spreading infections. HealthQuest invested more than $3 million in Vestagen, Kong said.

—Burlingame, CA-based First Aid Shot Therapy, which has been developing over-the-counter remedies formulated as a liquid shot to treat everyday conditions such as pain and upset stomach. HealthQuest invested about $15 million in the company, also known as F.A.S.T.

—Friendswood, TX-based Castle Biosciences has been developing molecular diagnostic tests to help doctors determine the optimal treatment for patients with uveal melanoma, cutaneous melanoma, esophageal cancer, thymic cancers, mesothelioma and gliomas. HealthQuest led an $11.8 million round that included Mountain Group Capital and Longfellow Venture Partners.

Kong, was previously a general partner at Sofinnova Ventures, and will continue to manage some Sofinnova investments. But as the founder and managing partner at HealthQuest, he will not be making any new investments for Sofinnova. Some of his deals include Cellective Therapeutics (acquired by AstraZeneca), Novamin Technologies (acquired by GlaxoSmithKline), Cempra Pharmaceuticals (Nasdaq: CEMP), Serenex (acquired by Pfizer) and Alimera Sciences (Nasdaq: ALIM). Kong also sits on the board of Laboratory Corporation of America (NYSE: LH) and the Duke University Medical Center Board of Visitors.

Oher members of the HealthQuest investing team are partner Randy Scott, a medical technology entrepreneur based in Gainesville, FL, and venture partner Tom Callaway of Atlanta, GA, who founded a life sciences executive search firm in Atlanta.

Bruce V. Bigelow is the editor of Xconomy San Diego. You can e-mail him at bbigelow@xconomy.com or call (619) 669-8788 Follow @bvbigelow

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