Trust's new for-profit business, Project Sigma, will provide long-term support for emerging companies and technologies
UK-based health research foundation the Wellcome Trust is to invest £200m in the European life sciences industry.
The Trust has set up a new profit-orientated business, currently operating under the working title of Project Sigma, to manage the fund, which aims to provide long-term support for emerging businesses and technologies.
The news comes just a few days after a £100m fund was announced to boost the life sciences industry in Wales, backed by biotech entrepreneur Sir Chris Evans.
The Sigma fund intends to make individual investments of between a few hundred thousand pounds and £50m, according to a Financial Times report, and will also look for other backers to help support promising ventures.
"The Wellcome Trust is known as an investor that takes a long-term view," said Sir Mark Walport, the charity's director.
"Sigma will extend this successful approach to direct investments in emerging healthcare technologies, to give small and medium-sized companies the support they require to fulfil their potential," he added.
The Trust is the world's largest grant-giving charity, investing £641m in charitable activities in 2011 and with a target of investing more than £3bn over the next five years.
Its focus with the new fund will be on healthcare and life sciences businesses that are in an early stage of development, have "significant potential to grow" and will allow the Trust to be a majority shareholder.
Sir Mark said: "This important investment opportunity will help the Trust to fulfil its vision of achieving extraordinary improvements in health, by generating returns that can be used to fund the work of outstanding researchers in the biomedical sciences and the medical humanities."
The UK's biotech trade body, the BioIndustry Association (BIA), welcomed the announcement, with interim CEO, Glyn Edwards, describing the fund as “significant boost to companies developing new medicines”.
He said: “Given the time required to bring innovative healthcare developments to market, it is especially pleasing to see that the fund will take a long term view and provide companies with the support they need to reach their full potential.”
Edwards also called on the UK government to provide a similar investment for innovative life science businesses in its budget plans, which will be announced later today.
“We believe the government should introduce Citizens Innovation Funds which would make the government an enabler, rather than a provider of much needed investment in biotech, and other innovative sectors, as well as encouraging investment in innovation by the general public."
Heading Sigma will be Martin Murphy and Nigel Keen, who have been appointed respectively as CEO and chair.
Murphy is a former Partner at MVM Life Science Partner, a venture capital company focused on life science and healthcare investments, and has previous experience with 3i Group and McKinsey & Company.
Keen is currently chair of a number of technology companies in the healthcare and electronics industries, including Oxford Instruments, Laird, Bioquell and Deltex Medica.