Perceptive’s third credit fund has $1.1B in ‘incremental capital’ for growing biotech and healthcare companies – Endpoints News

Two years af­ter wrap­ping its sec­ond Cred­it Op­por­tu­ni­ties Fund with $675 mil­lion, long­time VC Per­cep­tive Ad­vi­sors hit the hard cap on its third — rais­ing $1.1 bil­lion to pump in­to biotech and health­care.

The firm ini­tial­ly set out to raise $750 mil­lion, ac­cord­ing to Sam Chawla, port­fo­lio man­ag­er of Per­cep­tive’s Cred­it Op­por­tu­ni­ty Funds (PCOF). With the larg­er raise, Chawla ex­pects Per­cep­tive to make 20 in­vest­ments, in­clud­ing 9 that have al­ready been giv­en out to com­pa­nies like C4 Ther­a­peu­tics and Pear Ther­a­peu­tics.

“We had like a two-month slow­er pe­ri­od” amid the pan­dem­ic, Chawla said. “But then it picked up pret­ty fast for us … A lot of the com­pa­nies in the sec­tor are re­silient … I think a lot of folks who were fol­low­ing us saw that.”

The firm closed its first PCOF in 2016 with $323 mil­lion, and its sec­ond in 2018 with $675 mil­lion. It made 17 in­vest­ments un­der the sec­ond fund, and plans on spread­ing the third to a mix of com­mer­cial and de­vel­op­ing stage biotechs, as well as com­pa­nies spe­cial­iz­ing in med­ical de­vices, clin­i­cal di­ag­nos­tics and health­care IT. Up­on clos­ing PCOF III, Per­cep­tive now man­ages about $2.1 bil­lion ded­i­cat­ed to pri­vate cred­it.

Per­cep­tive was found­ed in 1999. It has made 91 di­rect in­vest­ments over the last year, and touts re­cent pri­vate in­vest­ments in Sol­id Bio­sciences and Ac­er­ta Phar­ma. Ac­cord­ing to the com­pa­ny’s web­site, the bulk of its in­vest­ments are in pub­licly-trad­ed com­pa­nies small and large. The PCOFs are de­signed to pro­vide debt as less di­lu­tive growth cap­i­tal or in place of a crossover fi­nanc­ing.

“What are we look­ing for?” Chawla said. “We look for dif­fer­en­ti­a­tion in clin­i­cal da­ta as well as com­pa­nies that are bring­ing so­lu­tions to mar­ket that may be bet­ter or faster or cheap­er to de­liv­er bet­ter care.”

Chawla said Per­cep­tive’s most no­table in­vest­ment in the last year was in ArcherDx, a Boul­der, CO-based biotech work­ing on mol­e­c­u­lar de­tec­tion prod­ucts for on­col­o­gy. Last May, Per­cep­tive led a $60 mil­lion round for the com­pa­ny, which was lat­er ac­quired by In­vi­tae in a $1.4 bil­lion deal.

“It was a very suc­cess­ful in­vest­ment for us,” Chawla said. “Our strat­e­gy cen­ters on pro­vid­ing in­cre­men­tal cap­i­tal that is less cost­ly than eq­ui­ty cap­i­tal dur­ing a com­pa­ny’s life­cy­cle” to help it grow, he added lat­er.

Ex­per­i­ment­ing with new mod­els, Per­cep­tive birthed its first in-house start­up in Au­gust: the Chi­nese biotech Lian­Bio, which has three clin­i­cal on­col­o­gy and car­diore­nal can­di­dates in the pipeline. For $26.5 mil­lion in near-term pay­ments and $505 mil­lion in po­ten­tial mile­stones, Bridge­Bio of­fered up two tar­get­ed on­col­o­gy drug can­di­dates and gave Lian pref­er­en­tial fu­ture ac­cess to more than 20 of its pro­grams.

“We look at our­selves as fund­ing the growth seg­ments of health­care and life sci­ences. These are small and … mid-cap com­pa­nies that are grow­ing, bring­ing nov­el tech­nolo­gies to mar­ket, in­no­vat­ing and kind of heavy con­sumers of cap­i­tal,” Chawla said. Once those com­pa­nies scale-up, he added, “they quick­ly turn prof­itable in this in­dus­try.”