Versant Ventures, an American venture capital firm focused on life sciences, has chosen Vancouver to create new early stage drug development companies that are built to be sold to big pharmaceutical companies on Versant’s “build to buy” model.
Versant has invested $10 million in a new company – Inception 4 – based in Vancouver.
The new venture is working with Bayer Healthcare to develop a new drug to treat macular degeneration and other related eye diseases.
“Bayer has partnered up front on that program to commit research funding, commit to providing their capabilities, and they have an option on the program as well,” Versant Ventures principal Jerel Davis told Business in Vancouver.
Inception 4 is the new Canadian version of Versant Ventures’ Inception Sciences, which has spun out six pharmaceutical companies in San Diego in recent years.
“We wanted to start a unit in Canada, primarily based around the talent in Canada,” Davis said.
Versant Ventures has more than $1.6 billion in assets invested in life sciences. One of its early investments was Amira, which was sold to Bristol Meyers Squib in 2011. Versant used the profits from that sale to found Inception Sciences, which has since created six new companies and 100 new jobs in San Diego.
Under the “build to buy” model, Versant invests in early drug discovery companies and inks deals with large pharmaceutical companies up front to develop a specific drug or device. The pharmaceutical company has the right to acquire the company, but not its talent team. That team then moves on to the next new biotech startup.
“Part of what we do is play the middleman,” Davis said. “We connect great academic science with pharma companies that are looking for that type of program, and we help finance those companies.
“This is a great way to get pharma’s buy-in – there’s skin in the game – and also create an exit up front for us.”
Inception 4 currently has 10 scientists operating out of 887 Great Northern Way.
