A “deluge” of opportunities presented themselves to Merck Serono after the Switzerland-based biotechnology company lifted the lid on its corporate venturing fund last year and provided almost immediate justification for the decision to start a €40m ($49m) in-house venture capital operation. Receiving more than 400 business plans in the first nine months, however, caused some difficulties. The Merck Serono Ventures team of two under Roel Bulthuis was swamped, and their commitment to respond to all applications meant the team had to be doubled in size almost immediately. However, the result of the launch has been beneficial to the group formed only three years before in 2007 out of the acquisition of Serono by Germany-based Merck KGaA for $13.3bn. Bulthuis said: “Of the 400 business plans we received in the first nine months,about three quarters were relevant to the organisation [for potential investment, licences or partnerships] and we [at Merck Serono Ventures] are working with 30 potential deals. Outside the two deals already done, we aim to give feedback to everyone within three to four weeks.” Acting as an entry point for entrepreneurs to deal with one of the world’s largest pharmaceutical and biotech companies had been a positive, he added, and this process had been eased by the strategic and operational work undertaken since the formation of Merck Serono. Bulthuis said: “Merck Serono is quite a young organisation, formed in January 2007 as a biotech and pharmaceutical division of Merck. So it had a largely new management team and structure and could think through the internal organisation and external connections through business development, licensing, mergers and acquisitions and integrated them in an optimised approach. “Part of that thinking was how we networked with global venture capital firms and whether we should have an internal VC fund. The board agreed the business plan I presented in mid- 2008 to set up Merck Serono Ventures and implemented it by March 2009, so it moved fairly quickly.” The goal of the ventures unit is both to deliver financial returns and to act as a strategic division to access external innovation. With his team paid a normal salary plus corporate bonus rather than performance fees from the fund, Bulthuis reports to Christop Huels, vice-president early-stage licensing at Merck Serono, and he in turn to Vincent Aurentz, executive vice-president of portfolio development, and then to the chief executive Elmar Schnee. Merck Serono delivered €5.35bn in turno- ver, more than half its German parent’s revenues of just…
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Move to create in-house venture team vindicated
Jun 1, 2010 • James Mawson
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