Sofinnova Ventures beats Fund IX target with $500 mln

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Sofinnova Ventures has closed its ninth fund on its $500 million hard cap, beating its original target of $425 million, the firm announced.

Sofinnova Venture Partners IX LP was in fundraising for about five months, according to a person with knowledge of the process. The firm did not use a placement agent.

VCJ and affiliated website peHUB reported on July 3 that the firm was in the market. The tally of LPs is unknown, but the new fund has received a $35 million from Massachusetts Pension Reserves Investment Management Board, and the Illinois Teachers’ Retirement System also reportedly approved a commitment of $50 million to the fund in June, according to Pensions & Investments.

Sofinnova Ventures has done a good job sticking with its core strategy and maintaining size discipline in its fund sizes, according to Lisa Edgar, a managing director at Top Tier Capital Partners, a San Francisco-based LP in the fund.

“It can be hard to make money in this space, but they’ve been successful in doing that in such a way they had a lot of existing investors come back,” Edgar said.

Sofinnova, based in Menlo Park, California, with offices in La Jolla, California, and Dublin, Ireland, primarily targets late-stage clinical drug development companies in the United States and Europe. As well, Sofinnova will make “select investments” in earlier stage opportunities, the firm said. Its investment focus is on developing specialty pharmaceuticals and orphan disease products, the firm said.

“We remain committed to working with our collective network to identify and develop important new drugs, build successful companies, and continue to generate significant returns for our investors,” Jim Healy, general partner at Sofinnova, said in the statement.

Sofinnova closed its eighth fund in 2011 on $440 million, and its seventh fund on $375 million in 2006.

Fund VII was generating a 1.65x multiple and a 16.9 percent internal rate of return as of March 31, 2014, according to information from the Oregon Public Employees Retirement Fund. Fund VIII was producing a 1.33x multiple, according to Oregon’s information, though the system did not provide an IRR.

Partners on Fund IX are: Srini Akkaraju, Jim Healy, Anand Mehra, Mike Powell, Lars Ekman, David Kabakoff and Jay Shepard.

Akkaraju is the newest member of the team. He joined Sofinnova in 2013 as a general partner. Prior to Sofinnova Ventures, Akkaraju was a managing director at New Leaf Venture Partners. Before that, he was a co-founder and managing director at Panorama Capital, prior to which he was a partner at JPMorgan Partners.

In May, Sofinnova Ventures led a $72.8 million Series B funding in Spark Therapeutics, a late-stage company developing gene-based medicines for certain diseases. Other investors in the funding round included Brookside Capital, Deerfield Management Company, Rock Springs Capital, funds and accounts managed by T. Rowe Price Associates and two undisclosed healthcare funds.

Photo courtesy of Shutterstock.

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