After $900 million and $500-plus million fund closures last week from Foresite Capital and JP Morgan, respectively, another firm wants to enter the upper echelons of life sciences investing.
Decheng Capital disclosed plans for a $700 million global life sciences fund on Monday morning. The haul would mark the fifth life sciences vehicle for the investor, which has offices in Silicon Valley, Shanghai and New York.
Other multi-time life sciences investors have recently filed securities paperwork for their next funds, including Aditum Bio’s plans for a $400 million third fund.
New capital is sorely needed in the current financing environment as many biotech startups have struggled to secure additional funding, both in the private markets and via initial public offerings, which have been few and far between.
Biopharma venture capital funds have raised $13 billion on an annualized basis this year, according to a Stifel report from Sunday. The industry reached a peak at $31 billion in 2021, but it quickly dropped to $25 billion in 2022 and $22 billion in 2023.
“We have spoken to many funds who are facing an increasingly difficult time raising fresh money from limited partners in 2024,” Stifel wrote in its Sunday weekly report. “These conditions make the fresh funds announced by Foresite, JP Morgan and Brandon last week all the more impressive.”
Decheng is an experienced investor with about $2.1 billion in assets under management, according to its website. Over the past dozen years, it has backed drug developers, medical device makers, diagnostics and tools companies, among others.
Its portfolio includes the likes of Acelyrin, Aardvark Therapeutics, CG Oncology, Firefly Bio and Upstream Bio, which is reportedly eyeing an initial public offering. Pharmaceutical companies have recently swooped in to buy some of its portfolio companies, including Ipsen’s purchase of Albireo, Vertex’s acquisition of Alpine Immune Sciences and Merck’s deal for Prometheus Biosciences.
Decheng has yet to make its first sale for the fifth fund, according to an SEC filing. Its funds have increased in size over the years. The fourth fund targeted $650 million, according to a December 2020 SEC filing, and the third fund had a goal of $450 million, as outlined in an April 2018 filing.
Decheng and its founder Min Cui could not immediately be reached for comment by Endpoints News.
