Medicxi to Shake up the Biotech VC Investment Model with €200M Fund

UK-based investment firm Medicxi aims to attract more investors to the life sciences with a new fund that lets them cash in on their investments earlier than conventional funds.

Last week, Medicxi closed a €200M fund called Medicxi Secondary 1 (MS1), which was co-led by the UK’s Pantheon and Switzerland’s LGT Capital Partners. The aim of the fund is to buy at a premium the portfolio of a fund previously set up by VC company Index Ventures, called Index Ventures Life VI. This portfolio consists of six unnamed clinical- and preclinical- stage companies. 

By buying up this portfolio, Medicxi can reinfuse the six companies with the cash they need to develop their treatments. Furthermore, some of the proceeds from the portfolio purchase go to the original Life IV investors, who also get a chance to reinvest in the same companies by enlisting in the new fund.

This strategy, called ‘exit and reinvest’, is unusual in the biotech industry. Instead of the normal biotech investment model, where investors often wait several years for drug development programs to gain value, the investors in Index Ventures Life VI can cash in early on their investments, and also have the flexibility to reinvest.

We believe this exit and reinvest type of transaction can be the blueprint for future investments by investors interested in obtaining exposure to biotechnology,

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Published on Thu, 01 Oct 2020 15:56:39 +0000 and brought to you by nintex split array