LSP, a specialist life sciences and health care investment group, has raised more than EUR750 million for three different funds over the past ten months to invest in innovative drug development and medical technology companies across Europe.
This result constitutes a record fundraise in European life sciences, consolidating LSP’s leading position.
2018 has been a landmark year for fundraising in the European life sciences industry. Over EUR3 billion has been raised to date, with institutions being drawn to the non-cyclical nature of the strategy, recognising the enormous potential of the life sciences industry in Europe and increasingly focusing on the social impact of their investments.
LSP has developed over 120 companies since its inception in 1998, of which many have brought innovative drugs or medical technologies to the patient community. The firm has assets under management of over EUR2 billion in nine funds and has offices in Amsterdam, Munich and Boston.
“We have been delighted by the support we have received from both new and existing investors,” says Dr René Kuijten, managing partner of LSP. “I believe that our fundraising success is based on a number of factors: the increased efficiency and maturity of the European VC ecosystem; a shift in big pharma and medtech from an internal R&D to an acquisition-based model; and the performance of our funds”.
The European biotech and medical technology market has matured significantly over the last decade, becoming increasingly efficient at commercialising scientific innovation. The number of repeat entrepreneurs is a testament to this, with about one third of LSP’s new investments coming from entrepreneurs with whom the firm has had previous successes.
In its home markets of the Benelux and German-speaking regions of Europe, LSP has played a key role in harnessing support for life science ventures. Earlier this year, LSP’s Rudy Dekeyser and René Kuijten catalysed the foundation of the Oncode Institute in the Netherlands, which brings together 600 of the best oncology researchers in one single institute. Supported by the Dutch government, Dutch Cancer Society and nine Dutch research institutes, Oncode helps commercialise breakthrough discoveries and get them to patients faster.
Big pharma companies have shifted their business model, no longer relying solely on internal R&D to develop new products but rather acquiring VC backed start-ups and listed small-cap companies at a later stage. Today, at least two-thirds of new drugs coming on to market originate from universities and life sciences start-ups. LSP portfolio companies currently have over 100 products in patient trials, a pipeline larger than many of the leading pharma groups like Pfizer, Sanofi, GSK and Novartis.
LSP analyses more than 1,000 investment opportunities per year and thus can be very selective. The firm has built a stable team that has been together for an average of 15 years. LSP’s collegiate approach is designed to allow for growing companies and delivering new drugs and technologies to patients whilst generating superior returns for investors. Recent successes include argenx (auto-immune diseases; current value USD3.5 billion); Neuravi (minimal invasive stroke treatment, successfully sold to J&J); and Amarin (cardiovascular disease; current value over USD7 billion). In total, over the past five years alone, LSP has sold 23 companies.
Existing and new investors in LSP’s strategies include blue-chip insurance companies, pension funds, government funds, asset managers, family offices and, in particular, big pharma. For example, LSP 6 has been selected by Bristol-Myers Squibb to be its venture group of choice in Europe, following similar LSP relationships with GSK and Pfizer. Working closely with a pharma company provides LSP with deep insight into pharma’s thinking, enhancing its understanding of which companies are most likely to be attractive M&A targets.
