Sands Capital has closed its latest life sciences investment fund, a $555 million haul that could help support biotechnology companies preparing to go public.
The fund announced Tuesday, named Sands Capital Life Sciences Pulse Fund III, is the firm’s third since forming a life sciences-focused initiative, “Pulse,” in 2018. Sands Capital has now secured $1.3 billion towards the effort, including a similar-sized fund that closed in 2021. It’ll continue to invest in a variety of healthcare companies, from drug and diagnostics developers to the makers of medical devices and life sciences tools.
“The life sciences sector continues to innovate at a rapid pace, leading to breakthroughs that benefit both patients and society as a whole,” said Stephen Zachary, the firm’s managing partner, in a statement. “We are grateful to both the investors joining us in Pulse III and the talented management teams we’ve partnered with since the strategy’s inception.”
Sands Capital invests in private as well as publicly-traded companies, making the firm one of the “crossover investors” young drugmakers turn to when preparing for an initial public offering. A 2021 analysis from Pitchbook found Sands Capital to be among the most prevalent crossover investors over the previous six years, a particularly active time for biotech IPOs.
Among other companies, the firm invested in Karuna Therapeutics, Dice Therapeutics and Acrivon Therapeutics before they went public. Karuna and Dice have since been acquired.
More recently, Sands was one of the participants in obesity drugmaker BioAge’s $170 million Series D round, one of the 10 largest crossover fundings of the first quarter, according to a report from investment firm William Blair.
The fund’s closing comes amid a surge in biotech venture funding and crossover investing specifically. Data from HSBC Innovation Banking found that biotechs in the U.S. and Europe raised $6.8 billion in venture capital funding over the first three months of the year, roughly $1 billion more than the top quarter of 2023. William Blair analysts, meanwhile, cited a “palpable increase in the pace of ‘crossover’ rounds,” counting in a recent report 10 deals that raised a combined $1.8 billion between January and March.
That activity has helped grow what industry experts claim is already a sizable backlog of biotechs waiting to go public. However, IPO activity has recently cooled after a fast start to 2024. No biotechs have outlined plans for an offering since March or priced an IPO since early April, according to BioPharma Dive data.