NEA’s David Mott on what VC firm’s $2.6B fund means for biotech (biotechVC)

New Enterprise   Associates   packs financial firepower like few other venture capital outfits today,   particularly those investing in biotech. Fresh off closing a diversified   venture fund of $2.6 billion revealed in July, NEA is expected to spend   roughly a third of its capital from the fund on healthcare investments   primarily in the biopharma industry, General Partner David Mott   (who sold MedImmune to   AstraZeneca ($AZN)   for $15.6 billion in 2007), told FierceBiotech.

Venture firms have traditionally served a key role in backing big ideas in   bioscience out of academia or elsewhere, but lean times in the VC industry   over the past several years have left capital-intensive biotech businesses   starving for dollars. Amid austerity for lots of biotech VC players, NEA   seems to have survived the collapse unscathed–it’s latest fund of $2.6   billion is one of the largest hauls in history and follows its $2.5 billion   fund closed in 2009.

Historically, NEA has pumped 30% to 40% of its total funds into healthcare   companies, Mott says, with about two-thirds to three-quarters of the   healthcare pot dedicated to biopharma. (Mott says that the firm has no fixed   numbers for investing in any of its asset classes, but he expects the latest   fund’s allocations to be consistent with past percentages.) When you do the   math, those historic numbers applied to this latest $2.6 billion fund mean   NEA could funnel as much as $780 million into biotech/therapeutic bets.

No new healthcare VC funds this year can match those totals, and only a   handful of firms such as OrbiMed   Advisors,   Burrill & Company, Sofinnova   Ventures   and Third Rock   Ventures–all   of which have closed healthcare-focused funds between $400 million and $600   million over the past two years–come close. Mott and his partners are on the   winning end of a consolidation of money flowing to fewer VC firms, empowering   them to pick and choose juicy deals and terms to suit their profit   goals.

“I think it’s a fabulous time to be investing in biotech because   we’re in the enviable position of having so much capital and staying power as   an organization,” says Mott, whose firm has offices in the U.S., India   and China. “I think that’s a huge competitive advantage in biopharma   investing.”

Click   here to read the full commentary >> — in this article by Ryan McBride

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Posted in AZBio News.