News

Amgen and venture fund boost Seattle biotech group by $11.8 million

Accelerator, the incubator of biotech startups in Seattle’s South Lake Union, has more than doubled its capital, thanks in part to two strange bedfellows: the industry’s top company and a local venture fund that swore off biotech investing two years ago.

By Luke Timmerman
Seattle Times business reporter

http://seattletimes.nwsource.com/html/businesstechnology/2002095201_accelerator19.html

The new money comes from OVP Venture Partners of Kirkland, which once said it was through with biotech, and from the new venture fund of Amgen. Their $11.8 million contribution will add to a $10 million pot set up a year ago by MPM Capital, Arch Venture Partners, Versant Ventures and Alexandria Real Estate Equities.

The new investors found common ground at Accelerator for the same reasons as the rest: to exploit ideas at the Institute for Systems Biology in Seattle and pick the brain of its president, Leroy Hood.

Of the new cash, $800,000 is being sunk into the two Accelerator startups formed six months ago: VieVax, a vaccine company, and VLST, an inflammation and cancer company. Accelerator now has about $15 million left to invest, said President Carl Weissman.

Chad Waite of OVP and Jay Hagan of Amgen Ventures will join Accelerator’s board of directors. They will have a hand in starting an estimated six new companies in the next three years.

The investment represents a change of tune for Waite, who said two years ago that OVP would no longer invest in traditional biotechs that develop drugs. His reasoning was that the odds of success are too slim, development timelines too long and payoffs too small.

Waite said he still believes that, but in the past nine months he saw opportunities at the nexus of computing and biology as he "reconnected" with Hood, whom he got to know in the mid-1990s when Hood was starting Rosetta Inpharmatics.

***********

Accelerator

Located: Seattle, South Lake Union

Founded: 2003

Capital remaining for investment: $15 million

Portfolio companies: VieVax, a vaccine developer; VLST, an inflammation and cancer-drug company

Investors: OVP Venture Partners, Amgen Ventures, MPM Capital, Arch Venture Partners, Versant Ventures, Alexandria Real Estate Equities, Institute for Systems Biology

President: Carl Weissman

********

The two recently spent time nurturing a computational biology spinout from the institute, Nanostring Technologies.

Waite said Hood convinced him nearly half of the challenges ahead in biology will be solved by advances in computing. Waite said Accelerator may find opportunities that suit both of their interests.

"This [Institute for Systems Biology] is one of the premier research institutes in the world, and a significant amount of the problems they are addressing are right up our alley," Waite said.

Plus, he said, "I’ve made a lot of money with Lee [Hood] before."

Amgen, which unveiled its $100 million venture fund last week, said it joined "to invest in biotechnology in the Seattle area and collaborate with other leading life science investors."

Amgen’s chief of research and development, Roger Perlmutter, has close ties with Hood and is chairman of the board at the Institute for Systems Biology. Perlmutter often cites the lack of productive research and development at big drug companies, and his goal is to jump-start R&D at Amgen.

The main players at VLST, an Accelerator-backed company, are also former Amgen scientists. One, Steven Wiley, said the closer ties with Amgen could foster smoother swaps of intellectual property.

Weissman, the Accelerator president, said the new money will dilute the ownership stakes of the earlier investors, always a concern. The trade-off, he said, is that Accelerator will get new expertise on its board: OVP’s in computation and Amgen’s in developing and marketing drugs.

Neither Accelerator-backed company has published scientific proof of its concepts yet, and both companies remain secretive. Many in venture capital doubt a biotech incubator can succeed. But Weissman said both companies are on the way, and the new investment validates it.

"There are a lot of people in the Pacific Northwest that have talked about how to fund early stage technology, but Accelerator is doing it, with the most high-quality syndicate [of investors] you could imagine," Weissman said.

Luke Timmerman: 206-515-5644 or [email protected]

Copyright © 2004 The Seattle Times Company

Sorry, we couldn't find any posts. Please try a different search.

Leave a Comment

You must be logged in to post a comment.