12:00 AM
 | 
May 19, 2008
 |  BioCentury  |  Finance

Ebb & Flow

Making good on plans to expand its footprint in Asia, MPM Capital made a $20 million investment in Hyderabad CRO Sai Avantium last week. The company's primary focus is on providing chemistry services to biotech and pharma partners.

MPM's William Green said the firm had identified discovery and preclinical pharmaceutical outsourcing as a particularly ripe area for investment in emerging markets. "We then talked to our portfolio companies and found that a majority of them were outsourcing chemistry work to the same partner, which was Sai," he said.

In fact, this was the first institutional investment for Sai, which had been owned by the founders, management, family and friends until last fall, when Sequoia Capitalbought a stake from a previous employee.

"As Sai's footprint grows and their revenues scale, they'll be an IPO candidate for the Bombay and/or U.S. exchanges," said Green, who is joining the company's board. On the other hand, he added, "this is a very fragmented industry, particularly in India and China, so there is bound to be a good deal of consolidation," particularly over the next three or four years.

MPM had foreshadowed its interest in moving into Asia upon closing its $550 million BioVentures IV fund last month, which included new LP Reliance Life Sciences, the life science arm of The Reliance Group (see BioCentury, April 30). The firm also has investments in Australia and Taiwan.

Asset hunters

A group of recent alums from Oxford Bioscience Partners and Atlas Venture has teamed up to form Orion Healthcare Equity Partners, which is raising a $250 million first fund that is expected to close next quarter. The founding team members are Mark Carthy and Jeremy Lack, formerly of Oxford, and Joel Besse and Zina Affas from Atlas.

Orion's home base will be Boston, with an office in London coming soon. "We are particularly interested in trying to find international compounds and devices and then bringing them back to the U.S. where we've got CEOs in place and where you've got the stock market and capital markets to fund development of a young company," said Carthy.

"Our sweet spot will be identifying assets at a larger pharma company, ideally something like three or four products together, which are at the clinical stage that we can spin out and help establish as a company independent of the mother ship," he added.

The firm hopes to announce its first investment in the third or fourth quarter, and will look to do about 15 deals at around $15 million each. "Cancer, infectious diseases and the metabolic space are areas in which we are particularly interested because of the high unmet need in each," noted Carthy.

Relationship & Renshaw

Aceras Partners, a newly spawned venture firm that traces its roots to Paramount BioSciences, joined forces with Rodman & Renshawlast week to form a JV with an eye on investing in early stage biotech and life sciences companies. Rodman agreed to inject up to $30 million over the next five years, which will fund Aceras BioMedical, as the venture will be known. In exchange, Rodman will receive a 50% economic interest in all investments made by the JV.

Daniel DiPietro, founding partner at Aceras Partners, who is in charge of the 5-person team, told Ebb & Flow that the lure of the JV was the steady flow of prospects coming through the door at Rodman.

"The synergies we saw in the partnership are the constant deal flow they've got, which involves seeing an abundance of companies and being involved with so many biotech financings that we're...

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