Backed by Novartis and Alphabet’s Verily unit, Medicxi Ventures has set up a $300m biotech fund that will back European growth-stage biotechs – that it says do not have access to as much support as their counterparts in the US.
The fund – called MG1 and also backed by the European Investment Fund (EIF) – will support companies with therapies in late-stage development (phase II and beyond) and provide an alternative to seeking a public listing or a partnership or acquisition by a bigger pharma group.
The European life sciences sector is recognised for its innovation, but has been held back by the lack of growth capital, according to Medicxi. That failure to create a mature biotech funding ecosystem is often held up as one of the main reasons why Europe has not been able to nurture a ‘big biotech’ group like US companies Amgen, Genentech or Gilead – all too often promising projects and innovation leak away to other regions.
All told, only 13% of Europe’s phase II companies manage to move into phase III or beyond, leading to a significant loss of innovation, according to a report published last year by European Biopharmaceutical Enterprises.
MG1 co-founder and partner at Medicxi, Giuseppe Zocco, said the fund will “support ambitious European entrepreneurs who are willing and able to build innovative companies through advanced clinical development and market entry, rather than pursuing a premature and generally suboptimal early exit through partnering or M&A”.
It’s something of a departure for Index Ventures spin-out Medicxi, which until now has focused on providing risk capital to earlier-stage companies, and it says MG1 intends to back around a dozen companies over the next two to three years, mostly but not exclusively from Europe.
The new fund is remarkable for a number of reasons. It represents one of the EIF’s largest investments in life science, and adds Novartis to Medicxi’s established partnerships with GlaxoSmithKline and Johnson & Johnson (J&J).
Meanwhile, the involvement of Google sister company Verily – which will appoint two members to MG1’s scientific advisory board – marks a major push by the technology giant into Europe as well as a broadening of its focus from technology platforms to drug development.