Brad Bolzon, managing director of Versant Ventures
It’s a new year and a new pot of cash for Versant Ventures.
The firm announced Tuesday that it had closed Versant Venture Capital VI, reaching its hard cap of $400 million — $50 million more than was outlined in the initial SEC filing.
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Fund VI adds to the very healthy pool of private investment dollars currently available to healthcare companies. In a phone interview, Versant Managing Director Brad Bolzon said the firm would continue to seek out high potential therapeutic areas to maintain its strategic edge.
“What makes us unique is our global footprint,” he said. “Unlike most early-stage biotech investors who usually concentrate in one of the main hubs like Boston or the Bay Area, we are geographically broader, having a critical mass not only in the West Coast but Europe, Canada and the Northeast.”
With a global reach, Versant aims to target high potential therapeutics areas, such as CRISPR, regenerative medicine, cancer vaccines, fibrosis and NASH. If the startups are there, that’s great. If not, the firm will create them.
“If you look at our portfolio, somewhere between one-third to one-half of our companies will be completely built right out of academia,” Bolzon said.
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Some recent examples highlight that approach. In Dec. 2016, Versant teamed up with Bayer to seed a $225 million stem cell startup, BlueRock Therapeutics. It was an unusually large Series A, Bolzon noted, but it reflects the firm’s belief in the potential of regenerative medicine and the scientific talent located outside the major U.S. centers. BlueRock has a significant scientific presence in Canada.
Versant also has three biotech discovery engines: Blueline Bioscience in Toronto, Highline Therapeutics in New York, and Inception Sciences in San Diego, Vancouver, and Montreal, which accelerate the startup process.
“Right now our discovery engine network is expanding,” Bolzon said. “We have 80 scientists that are exclusively working on translating academic science into potential startups for the firm.”
When it comes to determining which fields are hot, Versant looks to Big Pharma and tries to understand what its pipelines may demand in the coming years. The investment aim is not simply to IPO. Bolzon noted that around half of its fund IV exits, which are now delivering, are coming through acquisitions.
“We’re trying to create a portfolio that will succeed in any market,” he said.
Versant is covering its bases but it has also taken some risks, most notably as the sole Series A investor for CRISPR Therapeutics. The startup’s science is based on intellectual property currently under dispute in a high-profile patent infringement case.
“When we invested, to tell you the truth, there were a lot of co-investors that were nervous and not wanting to come on board,” Bolzon said. “We were the sole investor in the Series A. I’m sure glad we were because we made a bet and then within I think the next 12-18 months, we had two mega deals with Vertex and Bayer and were able to raise a $140 million Series B.”
As of Tuesday, the 2013 startup had a market cap of over $900 million — though the patent litigation has still not been settled.
Looking ahead to 2017, the new fund should enable 20-25 biotechnology investments in the U.S., Canada and Europe. According to the company news release, the firm will begin making investments from Versant Venture Capital VI in the first quarter of 2017.
Photo: Versant Ventures
