Partners HealthCare is expanding its Innovation Fund from $35 million to $100 million, the Massachusetts health system announced today at the J.P. Morgan Healthcare Conference.The fund, which was launched as an experiment in 2007 with funding from Brigham & Women’s Hospital and Massachusetts General Hospital, provides startup capital to early stage life sciences companies. To date, it has funded 25 companies.
This second fund, at $100 million, is geared in particular towards therapeutics startups – with aims to provide early seed investments.“If you have a $1.5 billion research operation, how can you most effectively capitalize on the intellectual capital that comes out of all that research?” Partners Healthcare CFO Peter Markell said at the JPM conference.
“We’ve begun through improving our licensing and tech transfer operations – and also creating an innovation fund… to create new revenue streams.”Markell said that Partners Innovation Fund monetized three companies this year: Immuno-oncology startup CoStim Pharmaceuticals, acquired by Novartis; Adheron Therapeutics, acquired by Roche for $580 million; and Annovation Biopharma, acquired by The Medicines Co.
The total value of these three companies, together, was more than $1 billion, the fund says. Partners looked at the rate of return on the $35 million fund – it exceeded 30 percent – and took that as reason enough to expand its role in funding upstart life sciences companies.“The fund’s important from a revenue-generation point of view,” Markell said. “It also says to our physicians and scientists that we will help you with seed funding if you have a good idea – and we will get validation by bringing other funders in for you to help you commercialize your product.”