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Carlyle-backed investor Abingworth is tapping investors for a fund worth up to $1.5bn to bankroll clinical trials, as it pioneers partnerships with big pharmaceutical companies for a share of royalties from new drugs.
The UK-based life sciences investor is planning to finance as many as eight late-stage trials with the new fund, according to people familiar with the fundraising. Carlyle, the private equity group which bought Abingworth in 2022, will also invest in the fund as a limited partner, the people said.
The fundraising effort comes after Abingworth signed two royalty deals with large pharmaceutical and biotech companies earlier this year, and as the fund plans to return around $500mn to investors in a year in which the biotech venture capital sector has struggled.
In February, it announced a collaboration with California’s Gilead Sciences to develop the cancer drug Trodelvy in a deal worth up to $210mn. Trodelvy is already approved to treat some cancers including breast cancer, and Abingworth is now helping to fund trials to see if it can tackle lung cancer.
In April, Abingworth agreed to fund clinical research for an asthma inhaler with Israeli drugmaker Teva in a deal worth up to $150mn.
The latest fund is likely to close by the first half of next year, the people said.
Founded in 1973, Abingworth previously focused on venture capital investments in early stage biotech companies.
It hopes the new fund will attract larger pharmaceutical companies that want to reduce their capital expenditure, while still pursuing a larger portfolio of potential drugs for “more shots on goal”, an industry term for maximising the chances of getting a successful drug.
Pharma groups are eager to refill their drug pipelines as many blockbuster medicines will go off patent in the coming years. While smaller biotechs have previously done deals with specialist royalty companies to secure financing for expensive trials, it is unusual for larger drugmakers to take this approach.
Last year, Abingworth raised a $356mn fund to invest in trials alongside companies, which it said at the time was “significantly oversubscribed”, exceeding its target of $300mn.
Abingworth has told potential investors in the fund that it has historically had a higher-than-average success rate in spotting the right medicines and developing them in phase-three trials, with about 80 per cent of experimental medicines that it had helped finance receiving approvals. This compares to an industry average of about 55-60 per cent, the people said.
Abingworth previously invested in so-called “co-development deals” through portfolio company SFJ Pharmaceuticals. But in August, it hired SFJ Pharmaceuticals’ chief executive Robert deBenedetto to work with pharma companies and larger biotech companies.
The majority of these deals will now be done in-house or with Abingworth’s wholly owned platform Launch Therapeutics.
Abingworth and Carlyle declined to comment.