A few weeks ago Avalon Ventures founder Kevin Kinsella had this to say about the tough financing environment for biotech startups: "People who have bad ideas, who can't get funded, they think there's a lack of capital," he told the San Diego Union-Tribune. "But if they're truly insanely great ideas, they'll get funded."
Now Kinsella and his colleagues at Avalon are going to find out whether investors think they've been doing an "insanely great" job at finding the right companies to back. Dow Jones quotes a source saying the venture fund is out scouting for cash to back a new $200 million-plus fund. The venture group's last fund, completed in early 2011, garnered $200 million.
Avalon backs tech companies like Zynga, but also has a very active presence in the life sciences business. It made solid returns on Amira Pharmaceuticals, which Bristol-Myers Squibb ($BMY) bought last year for $325 million upfront and $150 million in milestones. And its backed Acceleron, Afraxis, Ambit and many others in the biotech business.
The industry could certainly use the money. While a number of venture groups have rounded up new funds, with New Enterprise Associates announcing a monster $2.6 billion fund just days ago, the amount of money being invested in drug developers has dropped sharply in the first half of the year. That downturn has helped raise fears that the life sciences industry may be in for a long stretch in which startups will find it increasingly hard to raise capital.
- here's the story from Dow Jones
The Top 15 Biotech Venture Investments in H1 2012