Ann Arbor, Michigan-based healthcare investor Arboretum Ventures has closed its fifth flagship fund, a $250 million vehicle that brings the total amount managed by the firm to more than $700 million.
The new fund is the single largest ever raised in Michigan eclipsing the earlier $220 million Arboretum IV fund raised in 2015.
Arboretum Ventures was founded in 2002 and focuses on medical devices, life science tools and diagnostics new tech-enabled modes of care delivery. The firm’s investment strategy hones in on commercial-stage companies that deliver healthcare cost savings and require less than $50 million of capital to achieve an exit.
The firm said that more than 70 percent of the investors in the new fund have been previous investors, speaking to the continued returns and success achieved by the company. New limited partners include two health systems and one insurer.
The firm has invested in a total of 48 companies and currently have 22 companies in its portfolio. Among Arboretum’s recent successful exits have been the sale of Maple Grove, Minnesota-based NxThera to Boston Scientific for up to $406 million and joint surgery company Si-Bone which went public last year in a $124 million IPO.
“The opportunity set within healthcare remains as strong as ever, given the aging of the baby boomers combined with increasing pressures to address rising healthcare costs through innovation,”Arboretum Managing Partner Tim Petersen said in a statement.
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.
“We look forward to investing Arboretum V in companies that improve healthcare quality while also removing excess cost from the system.”
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