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12:00 AM
Feb 05, 2007
 |  BioCentury  |  Finance

Ebb & Flow

Abingworth raised its first life sciences fund - a $50 million vehicle - in 1987. Twenty years later, the firm has closed its eighth fund, Abingworth Bioventures V (ABV V), at £300 million ($588 million). The new pot of money almost doubles Abingworth's funds under management to $1.2 billion.

The firm was looking to raise £250 million, but lifted the cap because the deal was oversubscribed. Managing Director Stephen Bunting told Ebb & Flow that most of the LPs were existing investors and included pension funds, foundations and universities.

Based in the U.K. with offices in the U.S., this is the firm's first sterling-based fund, which Bunting said acts as a hedge. "The majority of our fee income came in as dollars; we needed to have a hedge against that," he said.

ABV V will invest in biotech and device plays, from early stage to public companies in the U.S. and Europe. This time, Abingworth plans to invest £7.5-£20 million ($14.8-$39.5 million) in each portfolio company. In previous funds, the average total investment per company was around $15 million. With ABV V, Abingworth plans to make at least 20-22 venture investments.

Currently, the firm invests about two-thirds of each fund in early stage companies, with another 10-15% going to public equities and the remainder to late-stage private investments, Director Jonathan MacQuitty told Ebb & Flow. Half of Abingworth's investments are in European companies and MacQuitty doesn't expect this mix to change much.

He does expect Abingworth to direct more money into existing early stage investments to help prevent dilution in later rounds. "For earlier stage companies, we expect to increase the amount we invest over the company's life, but not necessarily at the beginning," noted MacQuitty. "We have the ability to do $30 million in a particular early-stage company."

MacQuitty also said Abingworth has "recently been involved with later-stage companies with revenue or, in some cases, profits." He expects this trend to continue.

In raising ABV V, Abingworth did have a number of exits to tell its LPs about. These include PowderMed, the vaccine spinout from Chiron that Pfizer (PFE) announced it would acquire last October for an undisclosed sum; drug delivery company Alexza (ALXA), which went public in March 2006; and RNAi company Alnylam (ALNY), which went public in March 2004.

Abingworth said it has invested in more than 90 private life science plays over the last two decades and that most have gone public, merged or been acquired.

Good diagnosis for MIPI

Molecular Insight(MIPI) achieved a $346 million post-money valuation in its IPO last Friday. That's close to the largest IPO valuation of 2006, when Affymax (AFFY) came in at $366 million.

The radiotherapeutics company raised $70 million through the sale of 5 million shares at $14, the low end of its $14-$16 range. The deal was underwritten by RBC; Jefferies; A.G. Edwards; and Oppenheimer.

In MIPI's roadshow presentation, CEO David Barlow described the company's business model as "inherently risk-contained" with a "much different technical and risk profile" than most drug development companies. He said it only costs MIPI $2 million to get into the clinic.

So far, the compay has focused on clinical candidates that are already marketed as well as on in-licensed compounds. Its lead product is Zemiva, a radiolabeled fatty acid analog (iodofiltic acid I 123) that is based on I-123-BMIPP, a known chemical compound that has been commercially available in Japan under the name Cardiodine. Zemiva is in Phase II testing to diagnose...

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