New BioLife Fund Set to Invest in Life Sciences Sector

New BioLife Fund Set to Invest in Life Sciences Sector

By Kim Hart
Washington Post Staff Writer
Thursday, March 15, 2007; VA12

The Center for Innovative Technology this week started a venture fund that will invest in the life sciences sector. The new BioLife Fund is an outgrowth of CIT's growth acceleration program, a three-year-old fund that finances early-stage technology companies in Virginia.

Johnson & Johnson provided the initial investment of $250,000, which will be matched by CIT. The BioLife Fund will finance start-ups in the pharmaceutical, medical devices and health services fields, said Peter Jobse, CIT president and chief executive.

About a third of the companies that looked for financing through the original venture fund came from the biotechnology industry, Jobse said. CIT makes an investment of up to $100,000 and helps to trigger the interest of other angel investors or venture capitalists. CIT's growth acceleration program has invested in 17 firms since it opened in December 2004.

A large concentration of life sciences start-ups has come out of the Charlottesville area, in connection with the University of Virginia, as well as Richmond and Virginia Commonwealth University. About a third of the companies are setting up shop in Northern Virginia, with some scientists coming out of George Mason University.

"The fund is not specific to firms coming out of universities," Jobse said. "We would like this fund to address the needs of the community as a whole, not just one aspect. Technology doesn't necessarily roll out of the [university] labs."

Some venture capitalists are wary of financing life sciences companies because they take much longer to generate a profit or a return on the investment. Jobse said the "social mission" of the fund helps balance out the risk of a long-term investment.

"If it takes nine years and $100 million to produce a great drug, there may not be an immediate payback," he said. "There isn't necessarily a great return on the financial side, but there will be on the social side."

The new fund is looking to provide cash to first-time entrepreneurs with advanced intellectual property, he said.