Third Rock’s fifth vehicle will bid to form and invest in more promising biotech ventures to follow the likes of multiple spinouts, such as Johns Hopkins' Thrive Earlier Detection.
Third Rock Ventures, a US-based biotech company builder and venture firm responsible for launching a range of spinouts, has attracted unnamed endowments for a $770m fifth fund, Bloomberg reported on Thursday.
Charitable foundation Wellcome Trust, which reportedly backed Third Rock’s previous funds, has backed the fifth fund, joining unnamed family offices and foundations.
Third Rock Ventures V will reportedly aim to back between 10 and 12 life science-focused businesses.
The $770m sum, the largest Third Rock has raised since its founding in 2007, was described by Bloomberg as evidence of strong investor sentiment for early-stage science despite uncertainty on public stock markets.
Third Rock Ventures pursues a company-building strategy focused on refining the business models of newly-launched portfolio companies, before providing financial, technical and human resources linked to agreed milestones.
Companies launched with Third Rock’s assistance include Johns Hopkins University’s cancer diagnostics developer Thrive Earlier Detection, which attracted $110m of series A funding in May 2019, and Harvard and Stanford-affiliated biotech company Maze Therapeutics, which raised $191m from investors including Third Rock in March 2019.
To date, the model has helped bring 10 biotech products to market, and Third Rock Ventures has so far achieved 19 public listings from its portfolio, according to Bloomberg.
Robert Tepper, co-founder of Third Rock Ventures, told the newswire his company would look to increase investments from its funds in future to match the rising costs of doing business in the US biotech strongholds of Cambridge, Massachusetts and San Francisco.
He said: “If we can hold on to those companies as the sole investor or the predominant investor, we think we can get much higher up on the value-creation curve.”
Third Rock closed its last fund in 2016 with $616m from undisclosed investors now known to have included Wellcome Trust, after raising $350m, $400m and $500m for its first three vehicles in 2007, 2010 and 2013 respectively, according to securities filings.
