Today we announced a pair of Corporate Strategic Partnerships (CSPs) with Amgen and Novartis, as part of our closing of Fund IX, with the aim of working closely with them during our venture creation process of starting new biopharma companies. Both companies have joined us as new Limited Partners in our recent fund. Here’s the summary aim of the partnerships:
The intent of these relationships is to provide Amgen and Novartis with strategic proximity to Atlas Venture’s startup formation activities around innovative, potentially high impact medicines, and catalyze future collaborations around translational research across Atlas Venture’s early stage portfolio. Amgen and Novartis bring their deep knowledge in pharmaceutical R&D with Atlas Venture’s focus on creating and building new biomedical startups with experienced entrepreneurs.
Importantly, the CSP relationships function with an “open market” principle. There are no obligations around deals, no exclusive rights, nor any fixed commitment of Amgen and Novartis to pursue opportunities. That said, through the mutual commitment of team bandwidth and dedicated liaisons/”EIRs” from our CSPs, we anticipate finding a set of opportunities for working together.
As noted in the press release, the range of potential collaborations could include launching new academic spinouts focused on taking novel science from bench to bedside, creation of drug discovery platform companies to exploit new therapeutic modalities or emerging biology, or the formation of new single-asset entities structured in line with our Atlas Venture Development Corp model, for example. We expect to start and/or fund more than fifteen biotech companies out of Atlas IX, and we are hopeful that a number of them will be collaborative efforts with our CSPs.
These CSP relationships are part of a macro trend in the life science ecosystem: larger corporate entities creating tighter relationships with venture firms as both direct equity partners in deals, and as LP’s and strategic partners. Today, over 75% of our deals have corporate venture groups as coinvestment partners; this number was below 5% a decade ago (as discussed here). The role of Pharma as an LP in venture funds is another element of the overall theme of supporting early stage innovation, and the list of relationships is significant and growing: Index linked up with both J&J and GSK; Flagship with Merck; Healthcare and TVM with Lilly on their dedicated “mirror” funds; MPM with Novartis and J&J; Longwood, Hatteras, Sanderling are in GSK’s venture portfolio. Each of these strategic LP commitments has their own expectations and agreement structures. It remains to be seen which model(s) will work best, but our belief is that the truly open market, strategic proximity model envisioned here with our CSPs will be one of the more mutually beneficial and productive approaches.
Looking forward to working with them as we invest our new fund.