Sofinnova Ventures Inc., a California venture firm with $1.4 billion under management, raised $440 million to invest in health-care companies and experimental drugmakers, the largest fund for the industry this year.
Sofinnova will seek out companies with drugs already in clinical trials, as well as purchase therapies developed by other pharmaceutical companies, said Garheng Kong, a general partner at the Menlo Park, California-based firm.
“The initial target was $325 million,” Kong said in a telephone interview. “Obviously we over-subscribed that, and had excess demand.”
The fund stands out because investors have had a harder time raising money this year. U.S. venture capital fundraising fell 53 percent to $1.72 billion during the third quarter, the lowest amount since the third quarter of 2003, according to the National Venture Capital Association.
Four other firms have raised health-care funds this year, totaling $40 million, said Emily Mendell, a spokeswoman for the NVCA in Arlington, Virginia, in an e-mail.
Sofinnova will also look for what Kong called consumer medicine, or companies with health-care products that don’t require approval from the U.S. Food and Drug Administration. A recent NVCA survey showed about 40 percent of 150 venture capital firms have decreased their investment in life sciences during the past three years, because of what they say are regulatory hurdles.
“It’s going to be part of our strategy to pursue these other opportunities that are slightly less regulated,” Kong said.
The fund is Sofinnova’s eighth, and largest to date.