Amgen Founder Binder Said Nearing $100 Million in Fund
By LAURENCE DARMIENTO
Almost a year after starting a local biomedical venture capital firm, retired Amgen Inc. Chairman Gordon Binder is close to raising his first fund, which is set at $100 million, sources say.
Binder, who formed Coastview Capital LLC last year with former Amgen colleagues and others, is scheduled to speak next week about the fund at the Southern California Biomedical Council's annual investment conference in Los Angeles.
Binder has not spoken publicly about his efforts since the beginning of last year, but sources said his appearance at the conference indicates that the fund may be nearing closure.
Binder did not return calls for comment but Edward Sonnenschein Jr., former co-chair of Latham & Watkins' venture and technology group, who joined Coastview as a managing director, said the firm would outline the types of companies it's interested in funding at the conference. Sonnenschein declined further comment, noting that the firm is still raising money.
"This would be our first significant L.A.-based life science fund, and once it is up and running with a portfolio and parameters with investments that can cause a positive snowball effect," said Ahmed Enany, executive director of the biomedical council.
Supporters of the region's biomedical industry have cited a lack of venture capital funding as a key reason why the industry in Los Angeles has lagged behind the Bay Area, San Diego and even Orange County.
L.A. County startups in the biotech, medical device and health services arena received just $65 million in venture capital funding last year, according to a survey co-authored by PricewaterhouseCoopers.
That's below Orange County's $183 million total, and well below the $681 million taken in by firms in San Diego, which has Southern California's largest biomedical community.
"Clearly that's a lot of new money going into the life sciences arena," said Geoffrey Barnett, a life science partner in the accounting firm's Irvine office, of Binder's new fund.
Local impact unknown
It is not clear how much of Coastview's funding would go to local firms. While Binder said last year that it's generally better for venture capitalists to fund companies close by and Coastview has offices in West Los Angeles and Calabasas he also noted his close ties to the Massachusetts Institute of Technology, where he sits on the board.
It's also unclear how much of a personal stake Binder will have in his own fund. Amgen announced last year that he exercised options valued at $161.2 million, making him one of the nation's most highly compensated executives in 2000, the year he retired both as chief executive and chairman.
Whatever the case, local startups will have other options. Also making a presentation at the conference is Hamilton Apex Technology Ventures, a new $150 million fund formed in San Diego last year.
The fund is looking for early stage companies in Los Angeles and Southern California with a focus on therapeutics, including biopharmaceuticals, drug delivery and medical devices.
"We want to be the premier life science venture capital fund in Southern California," said David Coats, a general partner in the firm.
The firm believes that startup biotech firms remain under-served, especially in Los Angeles, despite the fact that venture capitalists in other high tech segments are moving funds into life sciences.
Demand for biotech
Among the reasons cited by the firm is pent up demand after the Internet bust, technological advances, the advancing age of Baby Boomers and big pharmaceutical companies looking for their next big strike as they watch profitable brand name drugs go off patent.
But Camille Samuels Pearson, a managing director at Versant Ventures, another more established early stage healthcare venture capital fund that recently finished raising $400 million, said that too much money is now being dumped into the biotech arena.
"It's starting to create inefficiencies," said Pearson, who noted that early round financing is being bid up, requiring venture capitalists to put up more money for smaller shares of companies.
Even so, the firm, with offices in Menlo Park and Newport Beach, plans to send Pearson and three others to review the nearly two dozen companies making presentations at the conference. The company didn't finance any Los Angeles County healthcare companies in its initial $250 million fund, which it raised in 1999.
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