Genesys Capital Looks To Maintain Ownership Stakes, May Extend Fund |
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Brian Gormley
September 30, 2009
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Genesys Capital, a Toronto-based health care investor, is talking with limited partners about increasing its fund to C100 million ($92 million) from C75 million ($69 million) to give itself extra capacity to fund maturing companies.
The firm closed on C75 million for Genesys Ventures II LP in late 2007, said Damian Lamb, managing director, mostly from Canadian institutions. The partners have been speaking with these investors about adding C25 million to the fund in a second closing that could occur by the end of the year, he said. That would improve the firm's ability to maintain its pro-rata stake in each of the 10 or so medical device and biotechnology companies it plans to back with the fund, he said.
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So far the firm has completed three deals from its second fund and expects to have a total of five done by year-end, Lamb said. The firm does not have definite plans to begin raising a third fund yet.
Many other firms are facing similar circumstances, and are using a variety of mechanisms to compensate, such as cross-fund investing. The problem of maintaining ownership positions is especially acute for early-stage investors like Genesys.
The extra capital that would come through a second closing "would be nice to have, especially given the uncertainty around [exit] markets right now," Lamb said. "It would be nice to be able to stay with these companies longer."
Genesys looks for opportunities to seed medical device companies and get them into clinical trials on relatively little capital. Last year, it committed C2.5 million to Profound Medical Inc., which is developing a medical device treatment for prostate cancer that combines ultrasound thermal therapy, used to ablate prostate tissue, with magnetic resonance imaging, which is used as a guidance for the therapy.
The company, which has called down C1.75 million ($1.6 million) of the seed financing, is now gearing up to launch feasibility studies in the U.S. and Canada and is looking for C8.75 million ($8.1 million) in Series A financing to fund the trials, said Chief Executive Paul Chipperton.
Other Genesys portfolio companies include Affinium Pharmaceuticals Inc., a structure-guided drug discovery company; NeurAxon Inc., a developer of drugs for pain; and Allostera Pharma Inc., which is developing peptide therapeutics for autoimmune and inflammatory disorders. |
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