SR One, which was spun out from GlaxoSmithKline (GSK) in 2020 to form a fully independent venture capital business, recently announced the close of its second fund at over US$600m.
With Fund II, the investment firm now has over US$1.5bn under management.
The funding came from a series of backers, including family offices, pension funds, foundations, pharma companies, sovereign wealth funds and prior investors.
Focus on the endgame
Simeon George, co-founder and CEO of SR One, said the investors looks to align with biotech companies that have the potential to address significant gaps in the current treatment landscape.
Its portfolio companies are active in a broad range of therapeutic areas and technologies.
SR One has led or co-led financing rounds in notable biotech players, including CRISPR Therapeutics, Nimbus Therapeutics, Arcellx, Turning Point Therapeutics, Pandion Therapeutics, Principia Biopharma, and Progyny, among others.
In terms of the criteria the fund uses to select a biotech, the CEO told BioPharma-Reporter: “At SR One, we are agnostic to therapeutic area: we focus on following the science as innovations are happening across all disciplines."
What sets SR One apart, he said, is its focus on the endgame, looking to see where the unmet need is, and how a potential product could be used. "We work backward from there to help our companies develop and advance a program that supports these goals.”
Similar to its first fund, Fund II will be focused on investing across stages, to support biotech companies with the greatest potential to efficiently generate clinical proof-of-concept.
George maintains that SR One’s “deep operational experience” allows it to provide both capital and technical expertise.
There are three elements to its investment strategy.
First off, SR One looks to create or build companies. “We have experienced venture partners on our team who have joined since the spin-out from GSK to focus on this effort. An example of this is MiroBio – in last three years we’ve taken this company from research to developing a product toward the clinic that was subsequently acquired by Gilead [in August last year],” said the co-founder.
Secondly, it looks to lead Series A financings, with it sourcing and identifying quality opportunities, collaborating closely with entrepreneurs to help them realize their full potential. “A recent example is our investment in Rezo Therapeutics - a spinout of UCSF’s Quantitative Biosciences Institute (QBI) that is focused on advancing its pipeline of precision therapeutics based on a proprietary integrated disease network mapping platform,” added George.
Thirdly, the VC firm sees advantages in backing later stage investments. “With the recent slowdown in the IPO market, we are seeing more opportunities to support later-stage programs. A recent example is our investment in the Mineralys Therapeutics Series B. Mineralys, which has since completed its initial public offering, was one of the largest biotech IPOs so far this year.”
The CEO said SR One is embedded with its portfolio companies to actively collaborate and problem solve.
“In addition to the investment team, the SR One ecosystem includes venture partners with operational expertise and public market experience, which broadens the depth and reach of founder support that the firm provides.”
Progressing drug development programs
He said the fund aims to help its portfolio companies advance programs through “value-generating inflection points.”
“The concept can look like progressing drug development programs toward major milestones, or inflection points, which – when achieved – both generate financial value for the program and advance toward serving a meaningful patient need.
“We look at value generating inflection points across the clinical development continuum, which include clinical data readouts, licensing and partnership agreements, mergers and acquisitions, and commercial milestones. We are also able to look across potential sources of capital for a company, sometimes gaining access to the public markets through events such as an IPO.”
George acknowledged that the current funding environment for life science focused biotechnology businesses is more challenging than it was in the last couple of years.
“But it is nonetheless a fascinating time to work in life sciences. Regardless of economic conditions, innovation must advance with urgency to serve the patients who are in need. There remain significant gaps in treatments available to patients that we as an industry have a responsibility to attempt to address.”