Forbion Looks to Fund IPO Ambitious Companies With Its €470 Million Fund

Biotech-focused venture capital firm Forbion announced that its Forbion Growth Opportunities Fund (GOF) II hit its first close at €470 million ($500 million). The firm, which has offices in the Netherlands, Germany, and Singapore, will focus on investing in late-stage European life science companies that may soon set their sights on an initial public offering (IPO). The second GOF exceeded its target of €450 million ($477 million), marking a positive start to Forbion’s most recent and most ambitious funding project. 

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Goals of GOF II Amidst Market’s Lack of New IPO

2021 saw an astonishing number of biotech companies making their IPO debut, with over 100 companies going public last year. 2022 is an entirely different story. The number of new IPOs has hit a brick wall this year with no signs of picking up. Even in the thick of such bleak opportunities, Forbion’s GOF II is following its formerly successful principle of funding later-stage biotech companies that may have an opportunity to reach the publicly traded market in the near future. 

Forbion’s current portfolio includes 33 biotech companies that fit some of these criteria and has previously funded over 80 such companies. The firm hopes to add 15 more companies to its portfolio with the €470 million fund saying it is willing to invest up to €70 million in lead companies. 

“The European market for late stage, private life sciences investments is large and remains significantly underserved,” Managing Partner and co-founder of Forbion, Sander Slooteweg, said, “The increase in the number of institutional investors committing to the Forbion Growth Opportunities Fund II is a testament to our successful track record in investing in late clinical stage life sciences companies.”

While €470 million is GOF II’s precipice, Forbion says it expects to hit its €600 million hard cap by the end of the summer. The new mark is substantially higher than GOF I, which hit €360 million in April last year. 

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Following the Success of GOF I

Despite a smaller total pot, Forbion’s initial GOF I project demonstrated stellar results with the likes of an investment in Gyroscope Therapeutics. After the investment, Novartis acquired Gyroscope for $800 million upfront with the potential for $700 million in milestones and royalties.  

Other companies that Forbion invested in that have since gone IPO include Argenx, Replimune, Uniqure, and Dyne Therapeutics. Only time will tell whether or not Forbion will have the same success with its upcoming investments in the current economic landscape. Forbion says it is excited to see what the final close of GOF II will have to offer the firm and its potential investment opportunities later this year. 

Several large institutional investors, including PME, PMT, the Ewing Marion Kauffman Foundation, and Reggeborgh, laid down money in the first close of GOF II. Several returning investors, including Pantheon, Wealth Management Partners, and Eli Lilly and Company, are again lending their financial support to Forbion to fund late-stage biotech companies. 

While Forbion’s model of funding late-stage biotech companies in the past proved fruitful, the ever-changing economic landscape poses new challenges for the venture capital firm to overcome. Focusing on companies looking to go public at a time with so few new IPOs seems risky, and Forbion can only hope that its future investments will prosper as much as its previous ones.

Author

Reed Slater