The University of California system said it has created UC Ventures, an independent $250 million fund for investments in UC research-fueled enterprises, including several within healthcare.
With its 10 campuses, five medical centers and three affiliated national laboratories, as well as more than 20 incubators and accelerators, the university system said in a news release it is poised to capitalize on innovation “that is already the target of venture capitalists from around the world.” No tuition or state funding will be used.
The UC system cited several successful startups that were born within its campuses, including Aragon, which was acquired by Johnson & Johnson in August 2013; Kite Pharma, which filed for an IPO in June 2014; and Seragon, which was acquired by Genentech in July 2014.
The UC Board of Regents will vote on the proposal Sept. 18 during the board’s regular bi-monthly meeting at UC San Francisco’s Mission Bay campus.
“In addition to any financial benefits, we see this fund as a potential vehicle for providing resources to support the basic research and talent — among both faculty and students — required to develop innovations that can benefit California and the world,” said UC President Janet Napolitano in a statement.
The move into venture funding ends a longstanding UC policy that previously prohibited direct investments.
UC Ventures will be a stand-alone, independent investment vehicle structured to operate with a long-term, investment horizon. UC’s Office of the Chief Investment Officer will hold certain key governance rights and help UC Ventures develop its own resident expertise to mitigate risks. The UC Ventures team will have day-to-day investment management responsibilities.
A Deep-dive Into Specialty Pharma
A specialty drug is a class of prescription medications used to treat complex, chronic or rare medical conditions. Although this classification was originally intended to define the treatment of rare, also termed “orphan” diseases, affecting fewer than 200,000 people in the US, more recently, specialty drugs have emerged as the cornerstone of treatment for chronic and complex diseases such as cancer, autoimmune conditions, diabetes, hepatitis C, and HIV/AIDS.
In collaboration with its 10 campuses, UC also intends to create an independent advisory board of leading figures in Silicon Valley and California to provide advice and industry insight to UC Ventures. Advisory board members will be announced in the coming months.
The University of California plans to launch UC Ventures in 2015, subject to the approval of the UC Regents.
