November 3, 2020
Fountain Healthcare Partners today announced the Final Closing of its third fund, Fountain Healthcare Partners Fund III, L.P. (“Fund III”) with €125 million of committed capital, exceeding its initial target raise of €100 million. The Fund previously announced a First Closing at €118 million. The Final Closing includes the addition of Japan-based pharmaceutical and biotechnology company Kyowa Kirin Co., Ltd. (“Kyowa Kirin”).
Fund III is a dedicated life science venture capital (“VC”) fund and brings Fountain’s total capital under management to €300 million. Within the life science sector, Fund III will primarily focus on therapeutics and medical devices.
Fountain Healthcare Partners notes the €125 million capital raised was sourced from major domestic and international institutional investors, including fund of funds, sovereign funds, corporate investors and family offices.
Fountain Healthcare Partners will invest a majority of the capital in Fund III within Europe but expects to also make investments in the US market. Fund III is expected to make up to 10 investments in predominantly private life science companies and has already completed three deals:
- Mainstay Medical, developing a novel, implantable neuromodulation device to treat chronic lower back pain. In June 2020 the company received FDA approval for its ReActiv8 device in the US.
- Inotrem, a biotechnology company focused on innate immunity whose lead asset nangibotide is in a Phase II clinical study for the treatment of sepsis.
- Priothera, a Phase IIb/III clinical-stage company developing a drug to reduce relapse and mortality rates in leukemia patients undergoing stem cell transplants.
Fountain also recently announced the following:
- Roche’s acquisition of portfolio company Inflazome for €380 million ($450 million) upfront and undisclosed future milestone payments. Inflazome is a Phase II ready company with potential applications in the area of inflammatory diseases such as Parkinson’s, asthma, Alzheimer’s, COPD, and osteoarthritis.
- Bayer’s acquisition of portfolio company KaNDy Therapeutics for $425 million upfront and potential future milestone payments of $475 million. KaNDy is entering Phase III trials with an oral, once-daily non-hormonal drug for menopause symptoms.
Dr Manus Rogan, co-Founder and Managing Partner at Fountain, commented: “Fountain’s investment strategy focuses on building a balanced portfolio of companies with complementary risk and return profiles within the life science sector. This strategy has resulted in a strong portfolio of investments for both Fund I, Fund II, and now Fund III. We are pleased to have now reached our Fund hard cap of €125 million and are delighted to welcome such a high caliber strategic investor as Kyowa Kirin to Fountain.”
Aidan King, co-Founder and Managing Partner at Fountain, added: “Life sciences continues to be one of the most attractive sectors for investors. Fountain has demonstrated the ability to identify companies in this sector that are developing transformative therapeutics and devices to address unmet medical needs and in doing so to generate attractive investment returns. We appreciate the support of Kyowa Kirin as we select the remaining companies for Fund III.”
Takeyoshi Yamashita, Ph.D., Executive Officer, Director of Corporate Strategy & Planning at Kyowa Kirin, said: “Fountain Healthcare Partners’ Fund III and its focus on innovative technologies and products that address high unmet medical needs, give us a fantastic opportunity to support start-ups and emerging companies in the life science sector. This investment underlines our shared ambition to contribute to the health and well-being of people around the world by creating new value through the pursuit of advances in life sciences and technologies.”