Sofinnova Partners raises another $750M to back biotech, medtech startups

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Sofinnova Partners, a European venture capital firm, said Monday it raised 650 million euros, or $750 million, for a new fund that will support up-and-coming life sciences companies.

Most of the cash will be directed toward biotechnology startups developing new drugs, while 20% to 30% of it going toward medical device makers, said Maina Bhaman, one of the firm’s partners. Sofinnova has already funneled cash from the fund into five companies, among them radiopharmaceuticals startup Actithera and inflammatory disease drugmaker Elevara Medicines.

Sofinnova’s raise comes amid a recent influx of capital into biotech venture firms. After a slow start to the year, new life sciences fund formation rebounded in the third quarter, with $6.1 billion raised between July and September compared to a total of $4.5 billion over the previous six months, according to investment bank William Blair.

Deerfield Management, Omega Funds and Atlas Venture are among the firms that have closed new investment vehicles this year. And last week, Medicxi, another European venture investor, raised 500 million euros.

Sofinnova, specifically, has been a big beneficiary. The new fund is part of more than 1.2 billion euros in fundraising it announced earlier this year.

Sofinnova is one of Europe’s oldest and largest venture firms, founded some 55 years ago and now with more than 4 billion euros in assets under management. While the firm generally focuses on forming and being the first investor in a young life sciences company, it also backs spinouts from larger pharmaceutical firms, particularly those built around a single asset, Bhaman said.

Sofinnova has announced seven investments in young therapeutics makers this year, including blood disease drug developer Hemab Therapeutics, protein degrader startup GlycoEra and bispecifics specialist T-Therapeutics. Earlier this year, it also debuted a new Europe-focused fund called Biovelocita II that’s supported by Amgen, Bristol Myers Squibb and Pfizer Ventures.

Still, prior to a recent upturn, young companies largely struggled to get funding this year. Investors showed a lower tolerance for risk, making it difficult for “first-in-class opportunities” to get attention. “I think the market is a little bit wary of novelty at the moment,” Bhaman said.

Some of that hesitance is due to recent regulatory and political upheaval. Threats of tariffs on pharmaceuticals, leadership turnover at the Food and Drug Administration and some inconsistency in the way rare disease treatments are regulated have pressed maturing companies and their backers.

“If they’re doing a later-stage investment round, there is going to be pause,” Bhaman said. “Especially in some of the rare diseases, some of the gene therapy approaches, where people have to consider whether when you file, the FDA is going to stick to what they had said, or whether something’s going to change.”