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Ex-Biogen exec launches Bain Capital’s 1st life sciences fund

May 23, 2017

Bain Capital created a new health care fund, Bain Capital life Sciences, and raised $720 million to launch it. The firm’s first life sciences fund, outside investors make up $600 million of the fund, with the rest coming from Bain partners.

The fund is led by Adam Koppell and Jeff Schwartz. John Carroll, writing for Endpoints News, notes, “Originally they had eyed garnering something more than $500 million in external cash. By the time they hit $600 million and Bain kicked in the rest, it seemed like they had the right amount to do what they wanted to do.”

Koppell was previously Biogen (BIIB)’s executive vice president, strategy and business development. He left Biogen on June 2 to rejoin Bain. Before joining Biogen, he was managing director of Brookside Capital, the public-equity affiliate of Bain Capital. Before Brookside, he was associate principal with McKinsey & Company, where he specialized in consulting to biopharma and life science companies.

In a statement at the time, Koppel said, “It has been an incredible learning experience to have been part of Biogen during such a dynamic time in the organization’s history. I am honored to have worked with a team so committed to driving innovation and making a difference in the lives of patients, and I am proud of the progress we have made. As I prepare to move back to Bain Capital, I am certain that Biogen will continue to be successful in advancing important new therapies.”

Koppell and Schwartz’s team will include at least 10 executives, including physicians and PhD. Currently it also includes partner Jeff Green.

The fund plans to invest in four types of companies.

1. Inflection capital. Carroll writes, “Not blue sky venture startup capital … These would be biotechs looking to gain alternative capital that they may otherwise look to the public markets or a strategic transaction for.”
2. Growth capital. In other words, life science companies either already bringing in money or about to.
3. Fallen angels. Carroll indicates these are “generally public companies looking to access capital but damaged enough that they don’t want to do it through another stock offering at terrible terms.”
4. Large equity transactions. Schwartz told Carroll, “You can think larger, mature companies with cash-flow generative properties that need optimization, anywhere across the life science spectrum.”

Koppell and Schwarz plan to work five to seven deals a year in total, focusing on biotechs, device companies and diagnostic groups. They’re not expecting to invest in services or IT.

Carroll writes, “Their group has already made a couple of investments that help illustrate its focus. Bain and RA Capital—which shares some, though not all, of the same goals—led a crossover round for Solid Biosciences, founded by Duchenne dad and former JP Morgan investment banker Ilan Ganot. And the Bain guys also backed Dicerna Pharmaceuticals (DRNA) with a $70 million preferred stock deal, also alongside RA capital and some others.”

Koppell also tells Carroll that many of the biotechs that raised money or went public between 2012 and 2016 are going to be interested in raising capital again, and they plan to help.

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