OrbiMed Advisors, a private equity and venture capital fund founded in 1989, manages $5 billion, all of which is designated for investment in life sciences companies. OrbiMed is one of the world’s largest venture capital funds in this field. The firm has raised fifteen funds to date, the most recent of which has $500 million under management.
Since 2001, OrbiMed has invested in Israeli companies Given Imaging (Nasdaq: GIVN; TASE: GIVN), Predix Pharmaceuticals (since its first financing round), and in superDimension’s fifth financing round, which raised $27 million, and closed three weeks ago.
Five partners manage OrbiMed: Michael Sheffery, Carl Gordon, Jonathan Silverstein, founder Samuel Isaly, and Sven Borho. Silverstein is in Israel as part of a senior Global Capital Associates biotechnology delegation. Silverstein concentrates on private equity and deals involving biotechnology and medical equipment companies. Before joining OrbiMed, he was a director of life sciences in the investment banking department at Sumitomo Bank.
Silverstein said today that the main purpose of his visit was to find more companies worthy of investment. “OrbiMed is the world’s largest fund in its field. So far, we have invested $40 million in three Israeli life sciences companies, and we hope to continue investing. We’re fervent believers in the Israeli biotech industry.”
Silverstein says that OrbiMed invests in companies at all growth stages. “For example, we invested in Predix at an extremely early stage. Predix founder and CSO computational development Oren Becker came to our office with a computer presentation, and we decided to go for it,” Silverstein recalls. He hopes that the delegation will enable him to be exposed to a large number of companies.
OrbiMed is an unusual fund. US venture capital funds in this field are in no rush to invest in Israeli start-ups.
”You have to understand the industry. Only five out of 500 public biotechnology companies are profitable. If you examine the private companies, only 1% are profitable. These figures pose a huge challenge to investors in the field from Europe and the US. In this case, the geographic distance is significant, and most investors prefer to invest in companies that are closer to them. We think that there are interesting opportunities in Israel,” Silverstein explains.
"Globes": Geographic distance doesn’t deter US high-tech investors.
Silverstein: ”The Israeli biotechnology industry is just beginning. I believe that it will prosper, but it takes time. I’m convinced that more investors from the US will show interest in Israeli companies. There’s more available money in the US market, and investors are looking for opportunities.”
Published by Globes [online] - www.globes.co.il - on June 27, 2005