Franklin's new biotech play

Franklin's new biotech play

Franklin Templeton Distributors is raising $150 million for the Franklin Biotechnology Discovery Fund, a mutual fund that plans to invest at least 65 percent of its assets in equity of biotechnology companies in the U.S. and abroad.

Manager Kurt von Emster told Ebb & Flow that the fund has made three investments with the $3.5 million that's been raised so far. Those include the newly public Megabios (MBIO, see below), as well as Gilead (GILD) and Inhale Therapeutic Systems (INHL).

"We will invest in discovery stage biotech and small biotech companies in the $100 million to $500 million market cap range," von Emster said. He will continue to manage Franklin's $250 million Global Health Care fund, which will keep its 15 percent exposure to the biotech industry.

von Emster sees the new fund filling a void for the mid-cap biotech investor. "The only thing out there is Fidelity (Select Biotech), and that seems to be only in big cap names," he said.

von Emster also believes his fund will be more nimble than the

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