Third Rock Hires Three Partners—Says Team Complete to Implement Its Hands-On, Early-Stage Venture Model
Third Rock Ventures, the new Boston venture firm zeroed in on funding early stage, local life sciences companies, announced the hiring of three new partners yesterday. The company, which closed its $378 million fund in September, says it has now completed the core team needed to implement its somewhat unique model of providing top-tier operational and business development experience to startups that couldn’t afford it on their own. “We now have people that have founded companies, built companies, governed companies,” with experience in everything from business to medicine, finance, and science, says co-founding partner Kevin Starr. “We can actually go in with the entrepreneurs side-by-side and fill leading operating roles as we get these companies started.”
Third Rock’s new hires include Cary Pfeffer as partner, and Neil Exter and Craig Muir as venture partners. Also appointed, as senior associate, was Jake Bauer.
Third Rock was formed by a core trio of executives formerly with Millennium Pharmaceuticals (NASDAQ: MLNM) in Cambridge. Serial entrepreneur and footwear connoisseur Mark Levin, Millennium’s founding CEO (and founding chief executive of four other biotech firms); Robert Tepper, who was the company’s head of R&D and chief scientific officer; and Starr, who served as COO and CFO. Three additional partners (one of whom was also a Millennium veteran) had joined the firm by it’s official debut in September; this week’s additions bring the partner total to seven, and the venture partner total to two.
The core observation behind the firm, says Starr, was that many existing venture funds are so large they almost have to invest in later-stage biotechs, where the high costs of clinical trials and other work allows them to really put their cash to work on a scale big enough to make a decent return for the fund. The skill sets of these funds’ partners is also geared to this stage of a biotech’s evolution, and not the startup phase, he says. These and other factors, says Starr, leave a big opportunity for a firm focused only on early-stage biotech investments, especially those coming right out of a university. “What we realized was there was a big void that started to occur about 10 years ago that’s at an acute stage right now,” he says. “Nobody was playing that bridge from academia into business, and that was our opportunity at Third Rock.” (Nobody might be an exaggeration—as firms like Boston’s PureTech Ventures, led by Xconomist Daphne Zohar, have a similar focus. But we’ve heard about the void from many quarters.)
Another big idea behind Third Rock was that of forming a partnership team with deep operational, business development, and marketing skills, as well as more traditional finance experience. That way, says Starr, Third Rock could take a far more active role in working with its portfolio companies than venture firms normally do—and, because the partners could be deployed to work with several firms at once, Third Rock could provide much more experienced, hands-on help than most startups could typically afford. “We tried to get non-overlapping complementary skills of people that are just company builders,” he says.
The latest hires complete Third Rock’s team, he says. Pfeffer is an experienced business-development executive whose roots go back to a decade at Biogen—and he’s had his own biotech advisory firm since 2003. Muir, most recently senior vice president of technical operations for Codon Devices, has the extensive knowledge of robotics, automation, microfluidics, IT, bioinformatics, and other key areas needed to help companies build drug discovery platforms. Exter recently finished a stint as chief business officer at Alantos Pharmaceuticals, which was sold to Amgen. Both he and Muir are also former Millennium VPs. Bauer, joining as senior associate, just got his Harvard MBA and has worked in several biotech firms.
Third Rock has only made one investment so far, Starr says, in a still-unnamed obesity company that is currently housed in the same Newbury Street building as Third Rock. Starr says his firm will likely make two other investments early in the new year. And he can’t wait to be part of the action. “We’re going to be active in launching these companies ourselves,” he says.