5AM Ventures raises nearly half a billion for 2 new VC funds


5AM Ventures has closed two new biotech-focused capital funds, totaling $497 million in commitments.

That represents a significant new leap for the firm’s total, which had previously reached about $1 billion since its founding in 2002. Currently, 5AM manages investments in 73 life sciences companies.

According to the San Francisco and Boston-based firm, the new money was raised from a range of institutional investors, including corporate and public pensions, funds-of-funds, family offices, foundations and endowments.

The first new fund, 5AM Ventures VI, L.P., has netted $350 million to build and launch new biotech companies. The remainder will be picked up by 5AM’s first coinvestment fund—5AM Opportunities I, L.P.—aimed at buttressing its existing portfolio companies with additional capital.

In a statement, 5AM said it will continue to target early-stage life science companies, and focus on funding the development of therapeutics and drug delivery technologies, as well as research instruments and reagents.

RELATED: M&A, IPOs and VC raises: Biotech and medtech executives look to their crystal balls for 2019

The new funding follows a growing amount of optimism (and cash) in play in biotech since the top of the year. At the J.P. Morgan Healthcare Conference in January, two major purchases included Eli Lilly’s spotlight-grabbing $8 billion buyout of Loxo Oncology, plus Bristol-Myers Squibb’s $74 billion deal for Celgene, following last-second negotiations.

On the smaller stage, a handful of biotechs have filed IPOs worth tens of millions of dollars, such as former Fierce 15 winner Alector and Stealth BioTherapeutics. Those follow Moderna’s mammoth $604 million IPO last December—plus major VC raises for early-stage biotechs, with some topping $50 million, $100 million and more in series A and B rounds.

“If you’re good, you’re differentiated, and if you’re doing something that is really additive and beneficial, I think there’s a market,” Tmunity CEO and former Novartis exec Oz Azam told FierceBiotech during the JPM conference. “I’m feeling pretty bullish on this side of the fence right now that walking into 2019, this is a great year to grow companies and raise capital. Investors have seen the promise of our therapies now coming into reality and I think it’s going to be a great year to create value.”