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MPM Capital, World’s Biggest Healthcare VC Fund, Balances Startups With Stocks

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probably 10 years away from becoming reality, just not the “pie-in-the-sky” concepts which the firm considers is still 20 years or more away, she says. MPM scouts for these ideas every year in an annual retreat with its scientific advisers—people like Nobel Laureate H. Robert Horvitz of MIT, stem cell researcher George Daley of Harvard Medical School, and Irving Weissman of Stanford University.

A little more than a year ago, the group concluded that epigenetics—the science of turning genes on or off without any alteration to the underlying sequence—was an idea ready for prime time.

So MPM started building a company inside its Hancock Tower offices called EpiZyme, and got the folks at Kleiner Perkins Caufield & Byers to co-invest. This company remains in stealth mode, but Shiosaki, who has served as EpiZyme’s founding CEO, told me it has hired a “dynamic duo” from big pharmaceutical companies to lead the operation. More details are coming soon on how it plans to tackle this tough problem, she says.

MPM also sees itself as one of the venture funds that puts its partners to work in building the startups hands-on, not just putting down $30 million and attending a board meeting once a month, Vander Vort says. That’s been Shiosaki’s role at Epizyme. Other managing directors like Robert Millman handle intellectual property strategy, and Vaughn Kailian, a former CEO of COR Therapeutics, brings a commercial perspective on what healthcare products will ultimately sell.

MPM just recently held its 2008 scientific retreat, and Shiosaki wouldn’t say what big theme in biology the fund decided is ripening for investment, like epigenetics was a year ago. She did drop some hints, however, about asthma as a disease worth tackling, when asked what opportunities should bear fruit for biotech investors within the next 10 years. She made it sound like it’s in the firm’s interest, financially, to swing for the fences with some of these riskier bets. “These technologies can’t be just a little bit better than what’s out there,” she says. “They are fundamentally new mechanisms we’re talking about that will be differentiated in the marketplace. That’s the only way you really get paid.”

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