Lilly Asia Ventures closes Fund V at $750m hard cap
Lilly Asia Ventures (LAV) has closed its fifth healthcare fund – which operates globally but primarily backs companies with a China angle – at the hard cap of $750 million. It represents a meaningful step up in size from the $450 million raised for Fund IV.
LAV Biosciences Fund V launched with a target of $650 million and was substantially oversubscribed, according to sources familiar with the situation. LAV declined to comment on fundraising. LPs that have disclosed their participation include San Francisco Employees' Retirement System (SFERS) and Los Angeles County Employees Retirement Association (LACERA).
LAV was established in 2008 as a corporate VC arm of global pharmaceutical firm Eli Lilly, focusing on life sciences investments in Asia, particularly China. In 2011, it became independent. Fund III closed in April 2015 at $300 million, with commitments from a mixture of sovereign wealth funds, fund-of-funds and family offices.
The firm has more than 30 investment professionals based in Shanghai, Hong Kong and Palo Alto. It can pursue deals in any geography, but always with a China nexus. LAV primarily considers opportunities in pharmaceuticals, human therapeutics, medical devices, and diagnostics.
There are no top-down limitations on check size, which means the increases in fund size with each vintage have provided the flexibility to make more investments or to commit larger sums to individual deals.
Given the recent influx in growth-stage deals for Chinese biotech companies, there are numerous instances in which the firm has backed companies across multiple rounds. For example, Innovent Biologics raised $560 million prior to becoming the fourth pre-revenue biotech player to complete an IPO in Hong Kong last October under a new listing regime. LAV participated in a $20 million Series B in 2012 and then re-upped in the Series C and E rounds in 2015 and 2018, respectively.
In the past three months, the firm has contributed to an $80 million Series B for liver disease specialist Terns Pharmaceuticals, a $93 million Series B for cancer drug developer NextCure, and a RMB850 million ($125.5 million) Series C for diagnostics start-up Burning Rock. All three were existing portfolio companies.
At the same time, LAV continues to pursue an incubation model whereby it launches new start-ups internally or backs entrepreneurs who join as venture partners.
Last month, one of the companies to emerge from this program, Hangzhou Just Biotherapeutics (Just China), merged with VC-backed MabSpace Biosciences to create Transcenta Holding, a fully-integrated drug developer specializing in antibody-based therapeutics for cancer and other diseases. Just China was co-founded by Jonathan Zhao, who previously led Asia strategy for Amgen and Pfizer, and completed four rounds of funding between 2015 and 2018, according to AVCJ Research.
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