While many healthcare venture capital firms continue to ease away from early-stage deals, Third Rock Ventures has just restocked with $516 million to continue backing them.
With its third fund, the Boston and San Francisco-based venture firm says it will launch, build and support up to 16 healthcare companies. Its investment strategy hinges on backing companies at their formative stages or working with entrepreneurs, academics and scientists to create new companies based on their solutions. Third Rock likes technology platforms with the potential to create multiple products for different diseases.
Headed by executives who formed and sold Millennium Pharmaceuticals, Third Rock also takes a hands-on approach, oftentimes bringing key managers and strategic partners on board.
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Since its inception in 2007, the firm has raised about $1.3 billion and funded or launched 31 companies, including cancer immunotherapy company Jounce Therapeutics earlier this year. Last year, it spearheaded Global Blood Therapeutics, a drug developed focused on genetic blood disorders, starting with sickle-cell anemia.
It’s also had a few successes. Lotus Tissue Repair, which it launched in 2011, was acquired by Shire in January. Another portfolio company, Alnara Pharmaceuticals, was bought by Eli Lilly in 2010.
@johncfierce @matthewherper Someone noted to me, Third Rock has more funds (three) than exits (two.) Starting is the easy part…
— Adam Feuerstein (@adamfeuerstein) March 25, 2013
Fair point, but the firm is still relatively young, given its focus on early-stage companies and the traditionally longer life cycle of a life science startup. A PR representative for the firm pegged the average age of portfolio companies in Fund I at three years, and for Fund 2, just over a year and a half. So for now, we’ll applaud the team for being able to pull in that much cash and staying in the early-stage game while others play it safe with later-stage deals.
