Hot Investor Mandate: USA-Based Evergreen Fund is Most Interested in Orphan & Rare Disease Therapeutics Investments, Allocating Up to $10M

10 Feb

Atheneos Ventures is a healthcare-focused, evergreen incubator fund based in the San Francisco Bay Area, going forward focusing on orphan drugs and rare diseases via a holding company-fund business model pioneered by the firm in 2009 for common diseases. This new entity is called Atheneos Global, a pathfinder company, focused on orphan diseases is being launched in Q1, 2018. However, the firm collaborates with an affiliate, Spire BioVentures, on projects that are not in the orphan diseases space.

The firm has a very high threshold for working with companies, and makes most of its investments in companies with which there is some type of relationship, but it is open to new opportunities as well on a case-by-case basis. The firm is mainly focused on therapeutics and will consider platform technologies, however only platforms capable of generating drug candidates. The firm’s investment size varies widely depending on the needs of the company, and expected to commit between $5M-$10M for the life of the company (from start to exit). The capital structure depends on the financing round, with convertible notes being preferred for seed rounds and equity for everything else (no debt financing) with the preferred entry point being seed or Series A. Atheneos only co-invests, and does not lead rounds unless the key principals are part of the founding entrepreneurs. The firm has some limitations on geographic exposure and will consider companies in the United States, Canada, Singapore, Spain, the Netherlands, Switzerland or the United Kingdom.

Atheneos will invest in therapeutics (no specific indication) that treats orphan diseases with strong scientific rationale. For Atheneos, not all orphan indications are rare or ultra-rare since the future is fragmentation of common indications characterized thru genomics or proteomics profile. The firm is interested in earlier stage assets and will consider anything from pre-clinical up to Phase IIa. In the past, the firm has invested in therapeutics (a single asset or a company with multiple products), which treat unmet needs in glaucoma, thrombosis (in particular patients with prosthetic heart valves and renal dysfunction), atrial fibrillation, inflammatory disorders (such as ulcerative colitis), gastrointestinal disorders (such as constipation, reflux disease) as well as a small molecule to treat neurovascular disorders such as Alzheimer’s disease, wet-age related macular degeneration. Atheneos will consider early-stage therapeutics to treat orphan disease including small molecules, and novel biologics (including “biobetters”) that are likely to obtain or already have issued composition of matter patents and platform technologies (that could generate novel drug candidates) with least interest in repurposed drugs, biosimilars and cell/gene therapy candidates. The firm at present is not interested in diagnostics, medical devices or digital health but may work thru its affiliate, Spire BioVentures, for projects in this area.

Atheneos does not have any specific management team requirements, and will work with all entrepreneurs. A board seat is not always required, but is not uncommon.

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