New funds to boost European life sciences

Last November, LSP announced that it had raised €850m for LSP 7 and that it is intending to join forces with EQT, one of the largest European and top-ten global private equity firms. ”Just one day after the announcement of our partnership with EQT, a large investor decided to pursue a €150m investment in LSP 7, bringing the fund straight to the maximum size (hard cap) of EUR 1 billion. This investment immediately validates a key rationale for joining EQT: with EQT, we expect that we will be able to raise large funds much faster, serving the life sciences in Europe even better than before” says René Kuijten, managing partner of LSP and incoming head of EQT Life Sciences.

The fund that is expected to close in Q1 2022 under management of the renamed EQT Life Sciences aims to invest in companies developing new drug therapies and medical technologies, to help ensure that their scientific innovations benefit patients. LSP 7 is backed by five pharma companies, four of  which are from Asia and one from the US.

The firm expects to invest the assets in 15-20 companies developing new therapies and medical devices. Until today, four investments have already been completed: Evommune (dermatology and immunology), Egle Therapeutics (oncology and autoimmune diseases), Hotspot (autoimmune diseases, rare diseases and oncology) and an undisclosed radiotherapy company.

Some days before, the European Council  announced the European Scale-up Initiative, which is aimed to provide €10bn for late-state tech companies, to achieve EU technology souverenity. Experts told European Biotechnology that about a third of the money are earmarked to be invested into Life Sciences start-ups in the growth phase of development. The objective is to set up a the creation of 10 to 20 pan-European funds of over €1 bn each. The key element of this pan European Scale-up Initiative will be a fund of funds called the European Tech Champions Initiative (ETCI) managed and administered under a mandate by the European Investment Fund (EIF), a subsidiary of the European Investment Bank (EIB).

While the EIB and the EIF, which initially committed €500m, Germany and France said, they will contribute €1bn each to the multi-investor fund of fund structure that is aimed to help to create a European ecosystem for late-stage biotechs, medtech and digital champions that leverages additional money from private investors.