"A biotech fund, seeded by pharmaceutical companies, could focus on investing in early-stage drugs being developed in smaller biotechs, which could, in return, fuel big pharma's need for innovative drugs," said biopharmaceutical investment professional Mark Kessel in The Scientist some weeks ago. At that time, Kessel said biotech was having trouble raising the money it needed to fund innovative research and suggested that pharmaceutical companies put together a fund to support biotech.
"It seems pharmaceutical giants GlaxoSmithKline and Johnson & Johnson agree," says The Scientist's Jef Akst. The two companies have contributed $50 million each to a fund that will finance early-stage biotech companies, Akst says. Venture-capital firm Index Ventures has also contributed $100 million. "The new fund … is aimed specifically at the riskier, early-stage companies, including those in the United States, Europe, and Israel," he adds. "To receive some of the fund's money, biotech companies must focus on a single molecule and accept on to their executive teams an Index Ventures-affiliated entrepreneur, who has veto power at any time."