Foresite, a biotech venture firm, reloads with $900M fund
12 Jun 2024
Foresite Capital, an investment firm that backs life sciences and healthcare companies, has raised a $900 million fund.
The fund, Foresite’s sixth, will invest in companies focused on precision medicine, healthcare delivery and life sciences infrastructure, the San Francisco-based firm said in a statement Wednesday. In drug developers, specifically, the firm is looking for those using genetics and machine learning to identify potential therapies, managing director Vik Bajaj told BioPharma Dive.
Foresite first launched in 2011 and now has some $3.5 billion under management. Over that time, the firm says it has backed around four dozen companies that eventually went public, among them Regenxbio, Sage Therapeutics and more recently, CG Oncology. Foresite also formed a startup incubator called Foresite Labs that helped nurture Alumis, which filed for an initial public offering last week.
The firm’s most recent fund has closed during a cautiously optimistic time for drug startups. There are signs of a recovery, with recent data from the Biotechnology Innovation Organization suggesting venture fundings may be stabilizing to pre-pandemic norms after a prolonged pullback. Dealmaking has also surged, with buyouts of private biotechs at their fastest pace in at least six years, BioPharma Dive data show.
Still, investors remain more selective than they were during the market’s peak a few years ago. BIO’s data showed a drop in fundings going to preclinical companies, reflecting venture firms redirecting more cash to surer bets. Foresite, for instance, is spreading investments around, looking at companies that emphasize product development, are focused on single programs or are testing big ideas, Bajaj said.
The firm co-led a $1 billion funding round for AI drug discovery biotech Xaira Therapeutics in April. But it also this year participated in Series C rounds for Alumis and Obsidian Therapeutics, both of which have drugs in clinical testing.
”It's an even better investment environment, there are more opportunities to deploy capital at all stages of the productive development life cycle,” Bajaj said.
Foresite joins a number of other biotech investors to have recently closed, or are in the process of raising new funds. ORI Capital, Sands Capital and NewVale Capital are among those to have debuted funds since the start of the year, while Arch Venture Partners and Flagship Pioneering outlined plans, in regulatory filings, to amass their latest funds.
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