12:00 AM
 | 
Feb 18, 2008
 |  BioCentury  |  Finance

Ebb & Flow

Creating a series of next generation Genentechs is not exactly a modest goal, but that is what The Column Group is setting out to do. In mid-April, the firm expects to close its first fund of about $300 million, which will be dedicated to funding "big idea" therapeutics companies.

Column Group already has made three investments out of this fund, one of which was disclosed last week. NGM, a metabolic and cardiovascular company, garnered a tranched A round of $25.5 million, which is expected to fund the company for several years. The first tranche is for $8.5 million.

Initially, NGM will focus on the gastrointestinal endocrine system and stem cell biology to identify novel factors implicated in the systemic regulation of metabolism and energy homeostasis.

The round was led by Column Group, with Prospect Venture Partners and Rho Ventures as co-leads. A group of individual investors also participated.

Peter Svennilson, founder and managing partner of Column Group, told Ebb & Flow that the investment is largely a wager on NGM President and CSO Jin-Long Chen. Chen was previously VP of research and head of metabolic disorders at Amgen (NASDAQ:AMGN) and prior to that was VP of biology at Tularik, which the big biotech acquired in 2004 for $1.3 billion.

Tularik co-founder and former CEO David Goeddel is now a managing partner of Column Group. He will serve as chairman and acting CEO of NGM. Svennilson will be a member of the board, as will Prospect's David Schnell and Rho's Mark Leschly.

The syndicate has sufficiently deep pockets to finance most of NGM's private rounds going forward, Svennilson noted.

"We wanted to have a very strong syndicate from the start. It's a much bigger effort from the beginning than the typical drug discovery company," he said. "We wanted the management to know where the money is coming from for future rounds of financing."

Although the round is tranched, Svennilson underscored it doesn't mean investors will micro-manage the company. "This is not the cautious development of a young company," he said. Ultimately, Svennilson said, he expects NGM to be a "fully integrated new generation drug discovery company."

The Column Group's two other investments haven't been disclosed, although one is in infectious diseases and the other in cancer. The VC firm also expects to finalize a round for a vaccine company in the next few weeks. Ultimately, Column Group expects to invest in eight companies out of this fund.

"We will only build big-idea drug discovery companies, what we call the next generation Genentechs, as opposed to the trend toward specialty pharma over the past 5-10 years," Svennilson said.

Past & future tense

Vertex (NASDAQ:VRTX) and Acorda (NASDAQ: ACOR) both fell on earnings news only to end up on the week after closing financings.

On Tuesday, Vertex shed $1.07 to $17.14 in the wake of its aftermarket earnings report on Monday. It reported a 2007 non-GAAP net loss per share of $2.52, up from $1.51 in 2006, driven by spending on trials for Phase III telaprevir (VX-950), an HCV NS3 protease inhibitor that is its lead candidate to treat HCV infection.

The company has not yet reported its 2007 operating loss, but was looking to have only a little more than a year of cash. Vertex had an operating loss of $328 million in the first nine months of 2007 and...

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