The MRCF5 has recently completed its first close, raising NZ$224 million(AU$210 million) from the MRCF’s existing investors. This brings total funds under management to more than NZ$747m (AU$700m), making fund manager, Brandon Capital Partners, Australasia’s largest venture capital firm based on capital managed.
Brandon Capital is now looking to approach select institutional investors to raise an additional NZ$43M, to complete a second close at NZ$267m (AU$250m). Brandon Capital will be initiating conversations with New Zealand institutional investors in the hope that some of this capital may come from New Zealand investors, to support the increasing activity of the fund in New Zealand.
The new fund will focus on investing in early stage medical research discoveries linked to MRCF members, a network of more than 50 leading medical research institutes and hospitals across Australia and New Zealand. MRCF5 will replace MRCF3 which has backed 16 new start-up companies over the last four years and is now fully committed and reserved. The $230m MRCF BTF (MRCF4), supported by the Australian government, is still actively investing in later-stage Australianbiomedical companies that have progressed to clinical studies.
MRCF CEO and Brandon Capital Managing Director, Dr Chris Nave says, “This is an exciting opportunity for us to continue to capitalise on the world-leading medical research capabilities in Australia and New Zealand, developing homegrown biomedical innovations into life-saving therapies and supporting the local innovation ecosystem. Our previous early-stage fund, MRCF3, has now built a portfolio of 16 exciting new companies, 8 of which have progressed their assets from the pre-clinical stage to human trials. The capital remaining in MRCF3 has been reserved to support the existing portfolio and therefore, it was time for us to raise our next early-stage fund, MRCF5”.
“We’re seeking New Zealand institutional investors that may be interested in joining the Australian superannuation funds in the MRCF5 fund, which will be dedicated to commercialising the very best medical discoveries being developed in Australia and New Zealand.”
The MRCF is a unique collaboration between major Australian superannuation funds, the Australian and New Zealand governments, Australian state governments and more than 50 leading medical research institutes and research hospitals.
New Zealand MRCF member institutes include Auckland Cancer Society Research Centre, University of Auckland; Institute for Innovation in Biotech, University of Auckland; Brain Health Research Centre, University of Otago; Ferrier Research Institute, Victoria University of Wellington; Callaghan Innovation and Malaghan Institute of Medical Research.
The strong flow of exciting early stage medical opportunities coming out of Australian and New Zealand research institutes has driven the need to create the new fund, with the first investments for the MRCF5 identified.
MRCF New Zealand Investment Manager Duncan Mackintosh says, “The MRCF collaboration is unique in that it is made up of a network of member institutes, which provide the medical innovations and technical development capabilities. We assist by providing the capital and expertise to help guide them through the development and commercialisation pathways. This often involves establishing a company and putting in place a management team, in addition to providing the funding well before clinical trials or commercialisation.”
“New Zealand boasts some of the world’s best biomedical researchers, but historically there has been a lack of capital available for early-stage biotechnology companies and commercialisation expertise within the academic sector, limited by scale. The MRCF provides companies with vital capital through various stages of development, and works hand in hand with researchers and technology transfer groups to commercialise researchinto therapies that benefit public health globally.”
The MRCF model was created by Brandon Capital and is the first true partnering between research organisations and multi-billion-dollar superannuation funds globally to help drive innovation translation. Brandon Capital has received the backing of Australian superannuation funds including AustralianSuper, Hostplus, HESTA, and Statewide Super, who realise the benefits of venture capital in creating returns for their superannuates and also future industry and jobs for the countries. CSL, Australia’s largest biotechnology company, is also an investor in the MRCF Funds.
“We commend the NZ government on introducing the Research & Development Tax Incentive (RDTI) as forward-thinking, future-focused policies such as this will help catalyse New Zealand’s successful life science economy. Now more than ever, bipartisan political support for venture capital growth and innovation, alongside strong policies and programs are crucial not only for New Zealand’s success in the sector, but the country’s economy too,” Dr Nave says.
Brandon Capital developed the MRCF model to enable the capital markets to engage with scientists to help bridge the funding gap that occurs when therapeutic candidates need to progress from the lab bench to the human testing phase. At the time, no other funds existed for such early-stage biomedical research translation in Australia or New Zealand, and no one was prepared to fund the gap.
In 2007, Brandon convinced seven medical research institutes in New South Wales and Victoria, supported by those State Governments, to join the Medical Research Commercialisation Fund (MRCF) collaboration when it established its first fund with NZ$32m (AUD$30m) under management.
Brandon also saw a unique opportunity for Australian superannuation funds to help finance some of the most promising biomedical innovations coming out of Australia. Brandon thought that super funds could be interested in investing in opportunities which improve the future health of the nation, while at the same time accessing strong deal flows offering above market-average returns.
Since 2008, Brandon Capital managed funds have invested in more than 40 companies, many of which were founded by the MRCF. MRCF-backed medical devices companies Global Kinetics Corporation (GKC) and Osprey Medical have both brought products to market and are experiencing strong growth. GKC, spun out of the Florey Institute of Neuroscience & Mental Health, is now selling its novel Parkinson’s disease monitoring system in 17 countries, while Osprey Medical, spun out of the Baker Heart and Diabetes Institute, is growing sales of its dye reduction system for use in coronary angiography procedures across the United States.
Other Brandon managed companies that have had positive exits include: Elastagen (acquired by Allergan in 2018), Spinifex (acquired by Novartis in 2015) and Fibrotech (acquired by Shire in 2014). A dozen other companies, including, Aravax, Azura, Certa Therapeutics, EBR Systems, OncoRes Medical, PolyActiva, Que Oncology and Vaxxas currently have products in advancing clinical development.