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12:00 AM
 | 
May 02, 2011
 |  BioCentury  |  Finance

Familiarity breeds content

Euronext IPO for LSP fund to invest in publicly listed biotechs

European life sciences firm LSP raised €36 million ($52.5 million) last week in an IPO for its first in-house fund to invest in public companies. The firm is capitalizing on investors' familiarity with its venture performance as well as a return in excess of 150% on the public portfolio it has managed for a pension fund since early 2008.

On Wednesday, LSP Life Sciences Fund (Euronext:LSP) sold 360,000 shares at €100 per share.

New shares in the fund, which is similar to a mutual fund, will be issued automatically to future buyers who are unable to purchase them on the open market. That gives LSP the capacity to continue to raise more money over time, Joep Muijrers told Ebb & Flow.

Indeed, the fund raised an additional €3 million by week's end.

Ultimately, the fund is targeting €200-€250 million ($291.6 million-$364.5 million) from European investors. Although they're not the primary target, U.S. investors could allow the fund to grow even larger, Muijrers noted.

LSP has managed public healthcare and biotech investments for pension group APG Investments since 2008.

Muijrers said the investment strategy won't change. The fund will invest primarily in small and mid-cap European biotechs in the €50 million-€1 billion market cap range ($73 million-$1.5 billion). The fund also will invest in the U.S.

The firm marketed the offering itself starting in late February, rather than through a placement agent or underwriter. Initial investors were all institutional asset managers or family offices.

"It wasn't very difficult to raise this fund. Our track record and name as a specialist investor helped," said Muijrers.

"We've been in the business on the private equity side for almost 20 years," LSP's Mark Wegter added. "We've been following these companies for many years, building up an expertise network. We're really leveraging what we've been doing."

Wegter, Muijrers and Geraldine O'Keeffe, who all managed public investments for the APG account, will manage the new fund.

The fund closed its first week of trading down €0.01 to €99.99.

Tables

EPS watch
Company 1Q11 EPS est 1Q11 EPS actual Outcome Growth from 1Q10 4/29 cls Wk chg % chg chg Mcap 4/29 Mcap
Affymetrix Inc. (NASDAQ:AFFX) $0.00 $0.00 Met NA $5.40 -$0.34 -6% -$24.0 $381.5
The microarray company reported a loss per share of $0.14 in 1Q10, which included a $0.07 per share impairment on a nonmarketable security.
1Q11 total revenue was $74M, down 9% from $80M in 1Q10, and below the Street's estimate of $76M. The company said its customers shifted "towards lower-cost products."
AstraZeneca plc (LSE:AZN; NYSE:AZN) $2.10 $2.23 Beat by $0.13 10% $49.83 -$0.10 0% -$139.7 $69,612.5
1Q11 revenue fell 4% to $8.3B and includes a $550M reduction due to generic competition and government price interventions. Sales from the pharma's gastrointestinal portfolio, including Nexium esomeprazole and Prilosec omeprazole, fell 6% to $1.4B. The company said Nexium sales were down 18% in Western Europe as a result of generic competition. Sales in emerging markets rose 13% to $1.4B. SG&A increased 2% to $2.5B, which AZ attributed to the federal excise tax. Percent changes assume constant currency. The pharma raised its FY11 core EPS to $6.95-$7.25 from $6.45-$6.75.
Bayer AG (Xetra:BAY) ...

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