The Development Bank of Japan (DBJ) is joining forces with Kyowa Kirin, a Japanese pharmaceutical group, and US healthcare provider Children’s Minnesota to invest in 4Bio, a fund supporting companies in the UK and Europe.
4Bio aims to raise $200 million to $300 million for its third fund, twice the amount of its previous fund, focusing on early-stage private biotech companies. Despite the depressed share prices in the biotech sector, with the S&P biotech index trading approximately 50% below its peak in February 2021, 4Bio sees an opportunity to support innovation in the life sciences.
Dmitry Kuzmin, managing partner of 4Bio Capital, highlighted the "peculiar disconnect" between public markets and private life sciences investments over the past year. Approximately one-third of the US drug regulator's approvals were for advanced therapies, including the recent approval of the first Crispr gene-editing treatment for sickle cell disease.
Large pharmaceutical companies, with substantial cash reserves, aim to invest in early-stage innovation to replenish drug pipelines before blockbuster patents expire by the end of the decade. 4Bio is already deploying capital from its third fund, participating in a series A round for ViaNautis, a company spun out of University College London focused on developing genetic therapies for lung and central nervous system diseases.
While the UK government aspires for the country to become a "life sciences superpower," smaller companies often face challenges securing funding from risk-averse UK investors.