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12:00 AM
 | 
Dec 07, 2009
 |  BioCentury  |  Finance

Assetcentricity

With some notable company building projects under its belt with the likes of platform plays Addex Pharmaceuticals Ltd., Genmab A/S and Molecular Partners AG, Index Ventures now has proof of principle for the other side of its two-headed investment strategy.

Last month, one of its "asset-centric" investments, PanGenetics B.V., sold a Phase I antibody against nerve growth factor to Abbott Laboratories for $170 million up front and the potential of another $20 million in milestones (see BioCentury, Nov. 16).

Index is one of the most active backers of early stage biotechs, having invested in 15 series A and B rounds in the past four years. Of these, five are platforms being built out into companies. The other 10 are asset-centric entities that contain one asset, or a handful at most, that don't require the same level of infrastructure as the platform plays.

Indeed, the proportion of Index companies that follow the asset-centric model has doubled since 2005 from 33% to 66%. And with PanGenetics as visible proof of principle, the firm has another set of asset plays lined up to follow in its footsteps.

The Index approach is one of the more concrete examples of adapting to the new economic reality, which demands capital efficiency (see BioCentury, Sept. 14).

The asset-centric strategy involves identifying promising projects and halting them early if they appear to be only marginal once the first data are collected. The route to ROI is then achieved by selling higher quality drug candidates to pharma rather than trying to float fully...

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