Doylestown-based Pennsylvania Biotech Center (PABC) announced on Wednesday that its venture program for early-stage biotech companies, Hatch Biofund, has received millions in recent investments with a hope to close a $50 million round soon.
The announcement was spurred by a $5 million investment from the Bucks County Employee’s Retirement Board (and no, it’s not a new concept to see capital coming from a pension source like this; more on that below).
More than 80 companies belong to the 15-year-old PABC — mostly small to mid-size and working in science, research and pharmaceutical. About 40 member companies have operations on site in Doylestown, the org said.
The $5 million from the Bucks retirement fund is the most recent investment in Hatch, but the org has also seen a $10 million commitment from Daiichi Sankyo, a pharmaceutical company in Japan with a U.S. headquarters in Basking Ridge, N.J., PABC said. The Provco Group, in Villanova also recently invested $2 million. The fund’s leadership hopes to close its $50 million fund in the coming months.
“For 15 years, the PA Biotechnology Center has been quietly changing the world through its innovative and collaborative approach to 21st Century medicine and science,” said Robert J. Harvie, vice chair of the Board of Bucks County Commissioners, in a statement. “For our entire history, Bucks County has been a place where dreams can become reality and the launch of the Hatch Biofund is another part of that story. The County is proud to continue its support because we know the great work being done every day, and we are excited to be part of their future.”
Bucks County Controller Neale Dougherty said the responsibilities of the retirement board are to “protect and grow” the employees’ retirement fund, and that this investment supports that goal.
“The establishment of the Hatch Biofund, which will support early-stage and startup companies that are Pennsylvania Biotech Center members, is an obvious natural progression for the PABC,” he said.
There’s always risk involved with VC investing, and perhaps more so when people’s retirement funds are involved: Firms look to invest with a certain degree of confidence that they’ll make their money back. While it’s not entirely unique for a retirement fund to get involved in startup investing like this, it’s also not exactly common, Dougherty confirmed in a follow-up email to Technical.ly. (Hear more on how capital flows from institutions in this episode of our Off the Sidelines podcast.)
“Yes, this was a somewhat novel investment for the Bucks County retirement fund, so we heeded the advice of our financial advisory, who thoroughly vetted the investment opportunity and recommended we cap our position at no more than 10% of the $50MM Hatch Biotech fund,” he said.
The PABC also launched a sponsorship program last spring to support early-stage biotech companies via supplier services, education and collaboration. Sponsors in the program work with early-stage companies in PABC’s incubator; a previous partnership with the Unite IQ incubator PABC ran at The Discovery Labs in King of Prussia has ended since we last reported on it.-30-