Ebb & Flow

With the capital markets closed for IPOs for the foreseeable future, its no secret VCs are starting to plan early for potential trade sale exits. One way to do it was illustrated by MPM Capital, which came in as a new investor to lead last week's $38 million series B round for renal company Proteon Therapeutics.

As part of the process of getting to know Proteon, MPM realized that it would be a good match for investment partner Novartis (NYSE:NVS; SIX:NOVN).

MPM Bio IV NVS Strategic Fund is a fund managed by MPM Capital, which invests alongside strategic option deals by Novartis. Thus, the investment company is always on the lookout for the chance to introduce new companies to the pharma.

"We have a strategic fund with Novartis and have made a few non-confidential introductions of companies that we have come across. We love these deals when we can get Novartis involved," Todd Foley, managing director of MPM Bio IV NVS Strategic Fund, told Ebb & Flow. "When we first came across Proteon, we recognized that it would fit strategically well with Novartis' renal and transplant franchises."

Indeed, this isn't the first introduction MPM has made. In one disclosed deal in January, Peptimmune granted Novartis an exclusive option to obtain exclusive worldwide rights to develop and commercialize PI-2301, the biotech's multiple sclerosis drug candidate. In a separate but related agreement, the MPM Bio IV NVS Strategic Fund L.P. made an equity investment in the biotech (see BioCentury, Jan. 19).

As for Proteon, the B round plus the deal with Novartis has given it a combination of enough equity and non-dilutive finance to

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