venBio Writes New Chapter with $550M Fourth Fund (2024)

“I’ve always liked the idea of leading life in chapters,” says Corey Goodman, PhD, days away from his 70^th birthday.

That explains why he turned the page two decades ago on “a wonderful part of my life,” his successful nearly quarter-century career as a professor at University of California, Berkeley, specializing in Drosophila genetics and neuroscience, to take on the challenges of shepherding early-stage biotech companies as a venture capitalist.

Goodman is now a managing partner of venBio, which earlier this month completed an oversubscribed fund of approximately $550 million—the San Francisco firm’s fourth, and largest, life sciences VC fund. The new fund brings to nearly $1.5 billion the amount of capital raised by venBio since its inception in 2011.

Like the three earlier funds, venBio Global Strategic Fund IV is expected to fund 12 to 15 companies, with each company typically receiving $30–40 million.

However, the firm has invested more in a few companies—the highest being the approximately $60 million invested in ALX Oncology, a Stanford University spinout that Goodman co-founded in 2015 as Alexo Therapeutics. ALX, which went public last year, raising $172.7 million in net proceeds. develops cancer immunotherapies that block the CD47 checkpoint pathway and bridge the innate and adaptive immune system.

“We’re looking for opportunities that we think can actually build value in 3–5 years,” Goodman told GEN Edge. “It depends upon where we think there are unmet medical needs, where there are opportunities that we think will make a difference in people’s lives and we can get a clinical outcome.”

venBio is agnostic on the types of life-science companies it’s willing to fund. Their specialties, he said, are expected to differ from those the firm funded earlier, as new therapeutic approaches and new technologies reshape the life sciences.

Bunch of nerds

“What’s going to be the same, though, is that it’s the same team. It’s the same six of us on the investment side and very much the same kind of strategy,” Goodman said. “We enjoy working together. We all have MDs and PhDs, and we like turning great science into impactful medicine. You know, we’re a bunch of nerds!”

Among the six are venBio’s other three managing partners: Robert Adelman, MD, formerly a Private Equity Partner with OrbiMed Advisors; Aaron Royston, MD, MBA, who joined venBio from life-sci VC firm Vivo Capital; and newly promoted Richard Gaster, MD, PhD, previously head of translational medicine at Pliant Therapeutics.

venBio’s team also includes Yvonne Yamanaka, PhD, previously a member of the venture creation team atFlagship Pioneering; and Venture Partner Jaume Pons, PhD, a former senior vice president at Pfizer, who was Chief Scientific Officer and site head of Pfizer-owned Rinat Neuroscience.

Before joining Pfizer, Pons invented the preventive adult migraine drug Ajovy (fremanezumab-vfrm), a calcitonin gene-related peptide antagonist developed initially by venBio-backed Labrys Biologics. Teva Pharmaceutical Industries acquired Labrys in 2014 for up to $825 million.

Ajovy is one of four drugs now on the market that emerged from venBio-backed companies. The other three are:

• Prostate cancer drug Erleada (apalutamide), an androgen receptor inhibitor marketed by Janssen Biotech, whose parent Johnson & Johnson acquired venBio-backed Aragon Pharmaceuticals in 2013 for up to $1 billion.
• Narcolepsy drug Wakix (pitolisant), a histamine-3 receptor antagonist/inverse agonist that emerged from Harmony Biosciences, now publicly traded.
• Paroxysmal nocturnal hemoglobinuria drug Empaveli (pegcetacoplan), a complement inhibitor developed by Apellis Pharmaceuticals that won FDA approval in May.

An elected member of the National Academy of Sciences and a former Investigator with the Howard Hughes Medical Institute, Goodman has received numerous honors during his career, including the Alan T. Waterman Award, Canada’s Gairdner Biomedical Award, March-of-Dimes Prize in Developmental Biology, and the Dawson Prize in Genetics from Trinity College Dublin.

Last year, he shared the 2020 Gruber Neuroscience Prize with Stanford University President Marc Tessier-Levine, PhD, and Friedrich Bonhoeffer, PhD, emeritus director of the Max Planck Institute for Developmental Biology in Germany. Their research established the four major families of axon guidance molecules—netrins, slits, semaphorins and ephrins—and revealed how they functioned to furnish the wiring of the developing nervous system.

Goodman received his BS from Stanford in 1972 and his PhD from UC Berkeley in 1977. He spent eight years as professor of Biology at Stanford before moving in 1987 to UC Berkeley. He held the Evan Rauch Chair of Neurobiology and co-founded and directed the Wills Neuroscience Institute, where he remains an adjunct professor.

“A Lowly adjunct”

“I like to say I’m just a lowly adjunct professor at Berkeley, but it keeps me at least a little involved with students, and a little involved with the university. I love it,” Goodman said.

“My LPs [limited partners] keep asking me, ‘Cory, You’re about to turn 70. You’re well off financially. Why do you do this?’ And I say, ‘Because I love building companies and using my scientific knowledge to help human health,” Goodman added.

Goodman has co-founded numerous companies, starting in 1994 with Exelixis, now public, and including three whose boards he chairs: ALX, Second Genome, and Tallac (formerly Tollnine) Therapeutics. Others he co-founded include Ossianix, and Renovis.

Goodman left academia to become president and CEO of Renovis in 2001, a year after he co-founded the company. Renovis focused on studying gene expression profiles in neuronal cell types in order to identify drug targets associated with neuronal regeneration, pain, behavioral disorders, and psychiatric diseases.

Renovis was acquired by Evotec in 2008, a year after Goodman was recruited to be president and founder of Pfizer’s Biotherapeutics and Bioinnovation Center in San Francisco. Pfizer envisioned the Center as a small, entrepreneurial business unit that would develop the technology platforms through which it would deliver biotherapeutics, as well as foster collaborations with UC San Francisco and other partners.

In 2009, Pfizer closed the Center when it acquired Wyeth for $67 billion, in a deal completed in October 2009, six months after Goodman left the pharma giant.

“I spent two years on the executive team of Pfizer. I learned a huge amount. My division did incredible work. But I was longing for small companies and that whole entrepreneurial spirit,” Goodman recalled. “Big pharmas are like battleships. You can’t move very quickly. You’re not very nimble. Small companies are more nimble and that fits my own spirit better.”

The pharma industry and the broader economy emerged from recession around that time, driving Goodman towards entrepreneurship. Several VC firms sought his services after he left Pfizer, to no avail. “I like starting my own thing,” he said. The opportunity came after meeting Adelman, who had a similar desire to launch his own VC firm after plateauing at OrbiMed.

“We thought very similarly. We were both pretty nerdy. He had also come out of Berkeley originally, so we shared some West Coast roots.” The two co-launched venBio in 2011 with an initial fund of $179 million.

Convincing people

Stepping out of big pharma, Goodman was just trying to persuade investors that the first fund was going to work, even though he didn’t have a track record as a VC. “We convinced people in the pharma world who knew us individually and liked the way we were thinking. Our very first investors were Amgen, Baxter and PPD, and we had a small investment from Alexandria [Real Estate Equities],” Goodman said.

Amgen invested $75 million in the first fund, compared with the $10–30 million contributed by most of venBio’s investors. Baxter was interested because it wanted to expand into venture investment, as many biopharma giants have done: “Our deal with Baxter was they would invest in us and we would also help them recruit and build their venture group,” Goodman said.

“We developed personal relationships built out of mutual trust and respect. We were extremely indebted to them that they put their trust in us and, hopefully, I think they got a lot of good things out of it,” Goodman added.

By the time venBio raised its second life-sci fund of $340 million in 2016—a financing joined by Amgen with Baxalta (since acquired by Shire) and Merck & Co.—the firm had several successes to share with investors, including the acquisitions of Labrys and Aragon. venBio raised its third oversubscribed fund of $394 million in 2019; it closed and was announced in April 2020, soon after the pandemic emerged.

Other companies successfully nurtured by venBio include Seragon Pharmaceuticals, acquired in 2014 for up to $1.725 billion by Genentech, a member of the Roche Group; and numerous companies that have since gone public. In addition to Apellis and Harmony, they include Akero Therapeutics, Aurinia Pharmaceuticals, Pharvaris, Precision Biosciences, and Turning Point Therapeutics.

venBio has not specified the individuals and entities that raised the $550 million in venBio Fund IV, only to say they include “existing and new investors, including a broad range of institutional investors comprising corporate pensions, financial institutions, university endowments and foundations, family offices, and funds-of-funds.”

The investors are scattered globally, Goodman said—in Asia, particularly Hong Kong; as well as in Europe, Central America, the U.S., and the Cayman Islands.

“We started fundraising in February, and we finished in early May, and got the documents wrapped up and things closed by the end of May. We raised it all on Zoom,” Goodman said, due to COVID-19. “We didn’t have to get on airplanes. Isn’t that nice?”