How Medicxi increases Phase II successes with less capital
The former life sciences team from Index Ventures has set up shop as Medicxi Ventures with a heavily oversubscribed new fund, and an investment model that has so far scored it a 100% success rate in Phase II readouts while halving the capital needed to get there.
Medicxi is taking with it the 12-person life sciences team from Index, the remaining capital from the almost fully invested Index Ventures Life VI fund, and a portfolio of about 40 life sciences companies.
It plans to deploy the majority of its newly closed €210 million ($250 million) Medicxi Ventures 1 fund on asset-centric investments, which have been the team's bread and butter for the past decade.
The model, which began as an attempt to bring timelines for Index's life sciences plays closer to the firm's tech investments, has evolved over that time. But it has been extremely capital-efficient and extraordinarily successful in terms of R&D output since the beginning.
"Our strategy is heavily asset-centric," said Medicxi's Francesco De Rubertis. "In our model and our hands it's the best way of making sustainable and material reproducible returns on investment."
To date, seven of the team's single-asset investments have reached a Phase II readout, all of which were positive. The firm invested about €10 million ($10.1 million) in each of those hits, often as the sole investor to that point. That compares with an average of about $20 million for a traditional approach to creating and funding start-ups.
Over the long run, the firm hopes its success rate of getting from preclinical through Phase II will be 70-75% versus the industry average of about 30%.
Importantly, the team invested only about €1 million ($1.1