Medicxi Ventures is well on its way to becoming the largest independent European life sciences-focused investment firm in the world. This new $1 billion (695 million pounds) business is being spun off from Index Ventures’ biotech portfolio and is currently backed by powerful pharmaceutical companies GlaxoSmithKline (GSK) and Johnson & Johnson (J&J).
Led by the existing life sciences team from Index Ventures, Medicxi has already raised 210 million euros ($229 million) for a brand new fund targeting early-stage life sciences investments. GSK and J&J will each contribute 25% to this fund.
General partner Francesco De Rubertis, who will manage Medicxi along with three other ex-Index general partners, David Grainger, Kevin Johnson and Michele Ollier, explained that 80% to 90% of Medicxi investments are expected to be in Europe. While Europe tends to fall behind the United States when it comes to developing successful biotech companies, roughly 30% to 40% of the drugs approved by the U.S. Food and Drug Administration (FDA) each year are actually first discovered in European academic labs.
The way Index Ventures invests is far from the traditional approach. The firm typically invests in “virtual” companies that have minimal infrastructure and only one experimental medicine under their belt. While non-traditional, this asset-centric approach to biotech investing must have something to it to have caught the eye of giants like GSK and J&J.
Index Ventures is actually more well-known for their investments in the tech industry, but lately the firm has devoted its attention to a number of successful biotech companies like Denmark’s Genmab (GEN.CO). And last year, the venture sold XO1, a British firm that was working on a single early-stage anti-blood clotting drug and had just two employees.
GSK and J&J first became associated with Index Ventures in a European biotech fund back in 2012, and it’s a good sign that they continue to see opportunities to partner together unfold.
For more information on Mickael Marsali’s financial and biotech investments background, please visit his main website.