Startups, Hospitals

Partners HealthCare raises $171M for second innovation fund for healthcare startups (Updated)

Partners Innovation Fund II will invest in 15-20 companies, according to Roger Kitterman, Vice President of Partners Innovation. It will be particularly aggressive in gene therapy.

Note: This post has been updated with comments from Roger Kitterman, Vice President of Partners Innovation.

Partners HealthCare System has raised has raised $171 million for a second innovation fund targeting seed stage investments in life science startups, according to a news release.  The Brigham and Women’s Hospital and Massachusetts General Hospital each committed $50 million for the fund.

Several pharma companies have backed Partners Innovation Fund II such as Astellas Pharma, Eli Lilly, Shang Pharma Corp., and Simcere Pharmaceutical Group. The fund will invest in 15-20 companies, said Roger Kitterman, Vice President of Partners Innovation, in an email.

Some of the investments from the second fund include Tilos Therapeutics, Magenta Therapeutics and Lyndra, according to Kitterman. It has also made investments in two other businesses currently in stealth mode.

The investment strategy behind Partners Innovation Fund involves working with co-investor syndicates to reduce risk and calls for investing in biomedical sectors such as therapeutics, diagnostics, health IT and medical devices.

The new fund will allow Partners Innovation to seed companies at an even earlier stage, Kitterman said. He noted that gene therapy is one area the fund is exploring aggressively.

“Also, there are many new frontiers in oncology we feel are quite promising,” Kitterman said.

The group has invested in 35 companies since 2008. Spero Therapeutics develops treatments for gram-negative bacterial infections, a huge problem, especially for healthcare facilities seeking to protect patients from drug-resistant infections. It raised $77 million from its initial public offering earlier this month. LifeImage, another portfolio company, is one of the largest online exchanges for electronic medical image sharing.

Its investments have led to some successful exits. immuno-oncology drug developer CoStim Pharmaceuticals was acquired by Novartis. Roche snapped up Adheron, a company developing treatments for autoimmune diseases such as rheumatoid arthritis. The deal was valued at up to $580 million.

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