Monday, June 19, 2000
NewcoGen Group and OneLiberty Ventures today were to announce the formation of Applied Genomic Technology Capital, a venture capital vehicle solely focused on genomics companies. The fund - with the genetically appropriate acronym of "AGTC" - has raised $70 million of its goal of $150-$200 million, with the initial money coming from corporate sponsors including Affymetrix (AFFX), Antigenics (AGEN) and Millennium (MLNM), in addition to OneLiberty Ventures, PaineWebber and institutions and selected individuals.
AGTC will provide seed and early-stage money to companies that are in a position to build value based on the genetic code. Having the code, according to managing partner Noubar Afeyan, will set off an applications race to create value from the genetic data. "It's like the operating system metaphor," Afeyan said. "It's the source code, but it needs to be organized. We've got a bunch of 0s and 1s but it doesn't mean anything until it's organized."
Afeyan believes the value will come in the form of more efficient genomic tools and databases, which will lead to further improvements in miniaturization and speed and lower the cost of biological experimentation.
Afeyan and AGTC partner David Stone also are betting that the code will spawn new business models with a quicker path to profitability. In particular, they expect the new group of applied genomics companies will take on the characteristics of information technology and high-tech industries, including reduced regulatory uncertainty and more rapid product development cycles.
The applied genomics company, said Stone, "should have a product cycle. You'll be expected to have a beta-product out in six months ramping up to profitability rather quickly. That's less like the biotech model where you invest and invest and hope you get a product through the FDA."
NewcoGen, which creates venture companies in both life sciences and information technology sectors, was formed in 1999 by Afeyan and PE Corp. (see BioCentury, Sept. 13, 1999). In addition to serving as the fund's managing partner, Afeyan remains president and CEO of NewcoGen. The fund's other partners include former SG Cowen banker Nancy Crowell, and Edwin Kania (special partner), who is managing general partner at OneLiberty Ventures, which targets information technology and life sciences companies.