More Spanish Biotechs To Benefit From Ysios Backing
Latest Fund Closes at €216m
Executive Summary
Spain now enjoys a reasonable level of venture capital to help translate its scientific excellence into budding biotechs and the country's major life sciences backer Ysios is looking to unearth more jewels there, as well as in the rest of Europe and North America.
Spain's biotech sector has come a long way in the last decade or so, with its strong science capabilities now augmented by significant investment, much of which has come from Ysios, the country's largest life sciences venture capital firm, which has closed its third fund at €216m ($260m).
Ysios BioFund 3 (YBF 3), the group's largest to date, is targeting seed/early-stage and development-stage biotechs, with investment size per company typically of up to €20m. As with previous funds, about 80% of the YBF 3 investments will target Europe, with a special focus on Spain, while the remainder of the fund will be used for opportunities in North America.
Joël Jean-Mairet, managing partner at Ysios, which was founded in 2008 in Barcelona and also operates out of San Sebastián, told Scrip that "we see this as a very fertile environment. We keep saying the quality of the science in Spain is top notch," noting that it is near the top of the rankings for receiving European Research Council grants. "Historically, there has not been much venture capital but with Ysios we have been dynamic in building an ecosystem and it's growing, there are some earlier stage funds that have been formed," he said, adding that "here, there is a strong entrepreneurial spirit and Barcelona is home to two great schools, we have all the elements."
Fellow managing partner Karen Wagner noted that venture capital investment in Spain in 2020 doubled from the previous year and that “shows things are improving, though of course, we're a long way away from the US and the UK." She noted that "now we are investing with international co-investors," which means that the Spanish companies Ysios has backed, such as Sanifit Therapeutics S.A. and Minoryx Therapeutics, are much better financed. (Also see "Sanifit Smashes Spanish Record With €72.2m Fundraiser" - Scrip, 26 Jun, 2019.) (Also see "Spain Biotech Boost As Minoryx Raises €21m" - Scrip, 27 Sep, 2018.)
Jean-Mairet said: "When we initially started, we were criticized here by the local community who said, 'Why the hell are you investing abroad with this brand new fund?' I'm talking the first round of €65m, and we kept saying we need to establish relationships with other funds, so that next time we call them and we say 'Hey, we have a company that is super exciting,' it will not be a cold call. And actually, this is how it has played out."
YBF 3 has already participated in the recent €30m series A financing for Spanish oncology group Ona Therapeutics and provided seed funding for the Barcelona-based gene therapy start-up SpliceBio. Jean-Mariet added that the Navarra region of the country is an under-rated area for innovation, referencing the Center for Applied Medical Research (CIMA) in Pamplona as a place of "top science, they work with key industry leaders in pharma, they have many collaborations." (Also see "Spanish Oncology Start-Up Ona Raises €30m" - Scrip, 16 Jun, 2020.)
Ysios invested in gene therapy specialist Vivet Therapeutics, which was spun out of CIMA, but "we decided to put the headquarters in France," he said. In March 2019, Pfizer Inc. acquired a 15% stake in Vivet and secured an option to acquire the firm which is developing VTX-801 for Wilson disease. Wagner, who is on the board at Vivet, added that Madrid is "definitely also an important area," highlighting the hospitals and the research centers around the Spanish capital. (Also see "Pfizer Buys Option For Vivet In Latest Gene Therapy Tie-Up" - Scrip, 20 Mar, 2019.)
The scope of YBF 3, which includes €60m from the European Investment Fund, extends beyond Spain and Ysios has taken a lead or co-lead role in a number of recent rounds, including French eye gene therapy specialist SparingVision's €44.5m series A2 round and ADCendo of Denmark's €51m series A. (Also see "SparingVision Raises €44.5m For Mutation-Agnostic Eye Gene Therapy" - Scrip, 20 Oct, 2020.) (Also see "Danish Start-Up ADCendo Takes Aim At Novel Cancer Target With Fresh Funds" - Scrip, 19 May, 2021.)
Jean-Mariet said that "we invest mostly in the first or second institutional venture rounds or company formation but at the other end of the spectrum, we invested in [Dutch bispecific antibodies specialist] Lava Therapeutics NV in September and in March this year, we floated the company." He added, "We've looked at over 2,900 deals in the last 13 years and we have invested in 34. They have to be disruptive, differentiated and address unmet medical needs. We are agnostic in terms of therapeutic modality and geography, and though obviously we look at Spain with special care, everything that smells of biotech we should know it's there." (Also see "IPO Update: What A Difference A (Pandemic) Year Makes" - Scrip, 1 Apr, 2021.)
Wagner claimed that one element of Ysios that differentiates it from some of Europe's larger funds is that "we have an entrepreneurial background, not only have a financial background, so we do work a bit more to build management teams. Everybody wants to invest into the perfect team, where everybody's already on board but sometimes we don't have that in Europe and we've got the network to build those teams." She concluded by pointing out that the management team at Ysios is "pretty gender balanced so that also makes it easier for us perhaps to be a bit more unbiased in terms of how we look at things."