At a time when few biotech venture capital firms are coming out of the gates, a Japan-focused investor is doing so and has closed a $200 million fund.
AN Venture Partners, or ANV, initially
outlined its $200 million target
for the fund in a regulatory filing in November 2023, but it didn’t officially close until this June, the firm told
Endpoints News
.
“We closed $200 million in 18 months, and I think in this environment that there are not a lot of people in that same conversation,” ANV managing partner Ken Horne said in an interview. Horne is joined by fellow US-based investment partner Ari Nowacek and Japan-based partners Takashi Futami and Jun Hashimoto.
Since opening in 2022, the San Francisco and Tokyo shop has been able to corral capital from more than 20 limited partners. It helps that the firm has an “alliance” with one of the oldest and most well-known life sciences investors in the game, ARCH Venture Partners, which itself pulled together a
$3 billion 13th fund
last fall.
ANV is one of a small crop of brand-new VC firms to have entered the life sciences sector in recent years, including Dimension, Curie.Bio and Cure Ventures, among others. Many of the top-tier biotech VC firms have re-upped with new funds in the past year, but there’s been a dearth of first-timers amid the market downturn.
More freshman funds are in the works, but since fundraising can take years, they are operating and investing in stealth mode for now. That includes NEXTBio Capital, Luma Group and others.
Horne said part of the appeal of ANV is that it offers a relatively new strategy for limited partners, rather than being another cookie-cutter early-stage biotech investment firm.
In particular, ANV is focused on supporting Japanese innovation and taking it to a global stage with biotechs based in the US and elsewhere, Horne said. Many of the “Asia healthcare allocations” for investors have been focused on China for the past 20 years, he said.
“Japan is a huge economy but stagnant, and there is a dearth of biotech in Japan, so for me it was like, ‘Maybe I could help my mother’s mother country out,'” Horne said of ANV’s origins.
Over the decades, Japan has struggled to build out a booming biotech industry on par with the size of the US. The amount of VC dollars funneled into Japanese biotechs pales in comparison to US startups.
“You can drop a pin in South San Francisco and draw a half-mile radius and have 100 times the enterprise value, or say in Kendall Square, than in Japan,” Horne said.
But the country has long had a vibrant basic research scene, which has helped lead to many blockbuster drugs, and its scientific output ranks toward the top in the world in terms of number of Nobel laureates and patents, among other categories, Horne said.
Those underpinnings are starting to lead to a more vibrant biotech sector, which has gotten a lift in recent years via
high-level support from the government
and capital commitments from some of the largest drugmakers in the country. Chugai unveiled a $200 million corporate VC arm in 2023, and Eisai established its VC outfit in 2019, with investments of roughly
$25 million per year
.
To help plant its roots in Japan, ANV convinced local pharma giants, like
Otsuka
and
Shionogi,
to take part in the fund. Aside from its monetary contributions, ANV is also hosting events, like Science-to-Startup, and collaborating with university researchers and various government agencies to support the growing biotech scene in Japan.
For now, many of ANV’s portfolio biotechs will likely be based in the US.
“When I first started talking to our LPs, one of the first things I said was, ‘If you’re going to say you have to build these in Japan, this is not going to work. The way to break this chicken-and-the-egg cycle is to marry the interesting science in Japan with experienced capital in the US and the experienced entrepreneurs and executives in the US, and build a success case first,” Horne said.
Eventually, that could lead to more homegrown Japanese biotechs with local leaders and investors, Horne said. A few biotechs are attempting to do the dual US-Japan route already, including cell therapy startup
Shinobi Therapeutics
. ANV is not an investor in Shinobi.
“There is interest in Japan. The kindling is all there, and really, one big spark will set that off,” Horne said.
ANV’s investment thesis is broad, with no clear therapeutic area or modality as a focus. It is also spreading its bets across stages, with the ability to do less than $1 million seed checks to help create new companies, all the way to Phase 2 big pharma spinouts that require more capital.
So far, ANV has backed seven startups and could eventually help finance about 15 companies overall with the first fund, Horne said.
Its roster includes mitophagy-focused
Capacity Bio
, gene writing startup Typewriter Therapeutics, next-gen RNAi biotech
City Therapeutics
and Cytokinetics-backed cardiometabolic company
Imbria Pharmaceuticals
. The other three portfolio companies are still working under the hood.