Firms & Funds

NovaQuest targets $1.5 bln for fifth drug finance fund

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North Carolina, private equity, pension fund
Carolina Panthers quarterback Cam Newton (1) during player introductions prior to the game against the Washington Redskins on Nov 22, 2015, in Charlotte, North Carolina, at Bank of America Stadium. Photo courtesy Bob Donnan-USA Today Sports
  • Fund V has held a first close
  • Money earmarked for drug development
  • NovaQuest also has a private equity team

NovaQuest Capital Management is targeting $1.5 billion for its fifth fund that focuses on drug finance investments.

Fund V held a first close recently on around $700 million, according to a person with knowledge of the situation. Atlantic-Pacific Capital is working as placement agent on the fundraising.

Raleigh, North Carolina-based NovaQuest provides capital to large biopharmaceutical companies that need funding to develop new drugs. The firm invests directly in the products being developed.

NovaQuest makes money by getting back its principal plus a profit, along with a drug royalty stream.

“Say you’re Eli Lilly, you have approvals (for a drug), and now you need to launch the product globally. That takes hundreds of millions of dollars. Sometimes this is where NovaQuest steps in and provides that capital,” a source told Buyouts in a prior interview.

The NovaQuest team began pursuing its strategy in 2000 as an investment group working at Quintiles Transnational Holdings. The firm’s founding partners are Ron Wooten, managing partner; John Bradley, senior partner; William Robb, partner; and Jonathan Tunnicliffe, partner.

Along with the drug finance strategy, NovaQuest also has a private equity group. NovaQuest Private Equity, led by a separate group from the finance team, invests in pharmaceuticals, medical technology, clinical/outsourcing, provider services, facility services and healthcare IT.

The private equity team is led by Wooten; Vern Davenport, who joined NovaQuest earlier this year; Jeff Edwards, who formerly co-managed the private equity program at the Teacher Retirement System of Texas; Guy Petrelli and Michael Sorensen.

No one returned a request for comment Wednesday.

Action Item: Check out NovaQuest’s Form ADV here: http://bit.ly/2fbQhVp

Photo: Carolina Panthers quarterback Cam Newton (1) during player introductions prior to the game against the Washington Redskins on Nov 22, 2015, in Charlotte, North Carolina, at Bank of America Stadium. Photo courtesy Bob Donnan-USA Today Sports