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Mar 03, 2014
 |  BioCentury  |  Finance

Spreading six

How Abingworth plans to invest its L225M sixth fund

Abingworth's sixth flagship fund likely will put more money towards the opposite ends of the firm's investment universe - start-ups and public companies.

The new fund closed last week at £225 million ($375 million).

Seven years after closing Abingworth Bioventures V (ABV V) at £300 million ($588 million), the firm lowered its target for ABV VI to £200 million because LPs "seem to prefer slightly smaller funds these days," the firm's Stephen Bunting told BioCentury.

Nevertheless, the cap ultimately was raised due to oversubscriptions.

The strategy for ABV VI will be similar to the last fund in that investments will deployed into four main categories: start-ups, late-stage venture, venture growth and venture investment in public equity (VIPE).

"I would anticipate more money to go towards start-ups and VIPEs," Bunting said, noting those investments had performed slightly better in ABV V. "But it will ultimately depend on deal flow."

A small slice - roughly 5% - will go toward open market purchases of public stock.

Bunting said Abingworth received strong support from existing LPs, which ponied up more than 75% of ABV VI.

Overall, funds of funds contributed 40%; followed by pension funds (35%) and foundations (7%).

"There have been fewer LPs investing in life science more recently, although that may be changing now. But even so, they are looking more carefully at all their investments rather than automatically re-upping," Bunting noted.

He declined to offer specifics on the type of returns Abingworth was able to tout to LPs on the fundraising trail.

Abingworth has made four of a planned 15-20 investments from ABV VI, which will range in size from £5-£20 million ($8.3-$33.3 million).

These include ophthalmic play Avedro Inc., in-licensing vehicle Avillion LLP, cancer company Effector Therapeutics Inc. and ophthalmic gene therapy play GenSight Biologics Inc.

Avedro is a venture growth company that markets a product outside the U.S.; Avillion is a start-up looking to in-license late-stage clinical assets; and GenSight last month began a Phase I/II trial of a gene replacement therapy to treat Leber's hereditary optic neuropathy (LHON).

Asante Capital Group acted as placement agent for ABV VI.

Tables

Earnings on deck
Company Date Pre/post mkt 4Q13 EPS est 4Q12 EPS Expected chg
Dendreon Corp. (NASDAQ:DNDN) 3/3 Pre -$0.37 -$0.26 NA
PDL BioPharma Inc. (NASDAQ: PDLI) 3/3 Post $0.43 $0.34 26%
WuXi PharmaTech Inc. (NYSE:WX) 3/5 Post $0.46 $0.38 21%
Merck KGaA (Xetra:MRK) 3/6 NA €2.12 €2.05 3%
EPS watch
Company 4Q13 EPS est 4Q13 EPS actual Outcome Growth from 4Q12 2/28 cls Wk chg % chg Mcap chg 2/28 Mcap
Alkermes plc (NASDAQ:ALKS) ...

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