Gates Foundation Looks to Make More Equity Bets in Biotech

6/28/12Follow @xconomy

The Bill & Melinda Gates Foundation has looked at a lot of different ways to get the most bang for every buck it puts into global health. Now its new global health leader, Trevor Mundel, says he hopes to do that by making more equity investments in biotech companies.

Mundel, a former Novartis executive, said this week in an interview with the Financial Times that the foundation plans to take equity stakes in as many as a dozen biotech companies, which will likely get a few million dollars each.

The Seattle-based Gates Foundation has traditionally given grants to academic researchers and companies to work on specific projects that could have an impact on global health, such as low-cost vaccines or diagnostics. By making equity investments, like the one it did last year in Research Triangle Park, NC-based Liquidia Technologies, the foundation can provide funds that can be used in a more flexible way for technologies with broad potential. As an equity investor, the foundation can also get a seat on a company’s board of directors to help influence a company’s strategic priorities over time.

As the FT points out, a few million bucks here or there isn’t a huge amount for the Gates Foundation, with its $37 billion endowment. And Steve Burrill, the biotech industry maven and founder of Burrill & Co., said in a recent interview with Xconomy that the foundation is “not going to save the biotech industry,” from its historic decline in venture capital fundraising. But any new investment in the sector at all is surely welcome news to life science entrepreneurs and their investors.

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