Biotech and pharma specialist Sanderling Ventures plans to raise a seventh fund, its first in seven years, coming on the heels of some recent exits, sources intimately familiar with the VC’s strategy told peHUB.com.
Sanderling, which did not use a placement agent for its 2004 $421 million fund, may take one on as it looks to reel in new LPs, one source said. While based on recent returns, Sanderling anticipates many of its existing LPs from its fifth and sixth funds will get on board for its next fund, peHUB’s sources did not express confidence the VC’s seventh outing would net as much as its 2004 effort.
The VC fundraising industry as a whole is facing an increasingly skeptical LP base and the asset class is expected to shrink in coming years. However, Sanderling has had a string of returns in January and February from each of its fifth and sixth funds. That’s quite a shift for a VC that Forbes dubbed earlier this year a “zombie” investor thanks to its lengthy lapse between fundraisings.
Taligen Therapeutics, the Cambridge, Mass., biotech startup Sanderling backed through its Series A and Series B fundraisings, was acquired in late January by listed, Conn.-based drugmaker Alexion Pharmaceuticals in a $111 million cash deal with future incentives attached. It marked an exit from a six-year investment for the San Diego VC; according to one source, Sanderling owned about 30% of Taligen at the time it was sold. Sanderling didn’t comment for this piece.
Earlier this month, Sanderling notched another victory with its many investments in Endocyte, the Indiana-based cancer drug developer now listed on NASDAQ. Sanderling’s fifth and sixth funds participated in all of Endocyte’s seven rounds, with the exception of its second, according to Thomson Reuters research. Net proceeds to Endocyte from the IPO were $78.8 million. Since its listing earlier this month, however, Endocyte shares have struggled in a market that has trended upward. Also, Pacira Pharmaceuticals, another Sanderling investment, priced its own IPO on NASDAQ on February 2.
Sanderling’s got other irons in the fire; Southwest-focused biotech VC Mesa Verde Venture Partners, based in San Diego, credits Sanderling with being its lead investor in 2006, according to its Web site. Sanderling and Mesa Verde teamed up in January to invest in the $15 million Series B raised by Lineagen, a Utah-based provider of diagnostic and consultative healthcare services.
Independently, Sanderling invested in Lineagen’s prior round, in August 2010. Other recent stake buys by the VC include Sanderling’s second buy into Gemin X Pharmaceuticals the same month, and a $21.3 million Series D investment in InfraReDx, a medical device company. Now that’s not staggering along too poorly, for a so-called “zombie.”
Eamon Beltran contributed research to this report.