Three healthcare pros find $250m

Former healthcare hands from Carlyle, Mount Everest and MPM have linked up to launch NGN Capital, a US-German venture fund that closed $100m above target.

Healthcare-focused venture group NGN Capital closed on $250 million (€208 million) for its inaugural NGN BioMed Opportunity I fund, exceeding its original target by $100 million.

Dr. Georg Nebgen, managing general partner, NGN Capital

Former Carlyle Group managing director Kenneth Abramowitz, Mount Everest Advisors veteran William Gedale and MPM Capital managing director Dr. Georg Nebgen came together in 2003 to launch the firm, which has offices in Connecticut, New York and Germany. The group rounded out its general partner roster last year with the addition of Dr. Peter Johann, recruiting him out of German pharmaceutical company Boehringer Ingelheim.

The fund will be global in scope, with roughly 90 percent of the investments taking place between the US and Europe, and the balance coming from other international outposts, possibly in Israel or Asia. The worldwide focus was an important issue for the firm.

“If you know pharma, than you know it’s a global industry,” Nebgen told PEO. “If you’re looking at only one side of the globe than you’re really missing out. In Europe there are as many, if not more, biotechs than in the US. The industry [in Europe] is still 10 years behind that of the United States, but it entering the development stage right now, and there are a number of companies that have already been funded that are reaching the pinnacle state.”

The fund is diversified by stage, although NGN is going to primarily look at late-stage investments. It has set aside a roughly 10 percent allocation for early-stage fundings. So far, NGN’s investments have taken the form of pharmaceutical spinouts and near-to-market technologies in the medical device, diagnostic and service healthcare industries.

John Constantino, a venture partner at the firm, noted that the NGN will be cautious in its early stage investments. “Three things need to happen,” he said.  “We really need to be convinced in the management to make an early stage investment. The second factor is that the technology has to be compelling. And lastly, there needs to be a clear path in which we can see an exit opportunity or a make a substantial enhancement to the company.”

The firm has already made a number of investments, roughly split between the US and Europe. Last August, NGN Capital joined Apax Partners and other investors in the $32 million series B financing that funded the spin-out of Bayer AG’s biotech respiratory drug projects and this past February the firm led a €31 million follow-on financing round in Berlin-based Jerini. Other portfolio companies include ultrasound-enhanced micro-catheter maker EKOS, and Paris-based Kika Medical SA, which develops software to manage clinical studies.
Goodwin & Procter served as counsel to NGN on the fundraising.