Arkin Capital, which specializes in investments in life sciences and other areas, has announced it has raised $100 million for an early-stage biotech fund — Arkin Bio Ventures III. This is another biotech fund that has been closed since the end of the war and the recovery of the biotech sector in the US. In the past two months capital has been raised by A-Squared (also belonging to the Arkin Group), Alive and Pitango Health.
The main investors in Arkin Bio Ventures III together with Arkin Capital are Israeli institutional investors including Phoenix Finance, Clal Insurance, and Amitim pension fund. The fund will not necessarily invest in Israeli companies, and the Arkin Bio Ventures II fund, established in 2020, has hardly invested in Israeli companies.
The Arkin Group also has a venture capital fund for late-stage investments, Arkin Bio Capital, with $300 million in investment funds, as well as funds for investing in public companies in the medical sector and a fund in the digital health sector. Thus, with the completion of the new fund raising, Arkin Bio currently manages a total of over $600 million for investments in the health sector. The Arkin Group as a whole has assets of about $2 billion, including venture capital funds, hedge funds and direct investments, also in the fields of technology, real estate and more.
The group’s venture capital funds for investment in biotech are led by managing partner Dr. Pini Orbach. The company said that the fund is dedicated to the memory of Alon Lazarus, who was biotech investment manager for Arkin Capital, and was heavily involved in founding the fund.
Orbach tells “Globes,” “We have raised about $100 million, to make about 8-10 investments, with each company investing around $10 million. Our previous fund was a little larger, but now it is also a little more difficult to raise capital, and this size also suits us in terms of the number of relevant deals we see and their prices.
“Companies will also be interested in early-stage companies, including Israeli ones.”
Orbach says, “We aim to invest in companies up to the proof-of-concept stage in humans and aim for companies that will not require additional funds after the financing rounds in which we will participate to reach clinical trials. We know companies that raised as much as $100 million in 2020-2022, invested it in a concept or technological platform and have not yet reached trials. We want to avoid that. Platforms are not given value today, but the leading product of each company.”
Orbach says that currently, the attention of global funds is less focused on early-stage companies like those in which the fund is interested in investing, and this is an opportunity for it. This is less good news for early-stage companies in the Israeli market.
“But the pendulum will swing back,” Orbach is convinced, “after the best assets are acquired in advanced stages, the acquiring companies will also be interested in earlier stage companies, including Israeli ones,” he adds that the success of a fund with Israeli institutional investors in the biotech field, even if most of the investments are foreign, contributes to the Israeli life sciences ecosystem. “This will allow us to take more risks in the future, and this also includes more investments in Israeli companies.”
The biotech fields that the fund has marked out are oncology, neurology, immunology, inflammatory diseases, rare diseases and gene therapy. The first investment has already been made, in Skylark Bio, which deals with gene editing therapy to treat deaf children. “This company is actually relatively advanced compared with our vision and is about to enter its first clinical trial with ten children this year,” says Orbach. “Treating deaf children and improving their hearing is definitely something I would be happy to tell my grandchildren one day that I was involved in.” The company has already attracted investment from leading US funds ARCH and Omega, and Arkin’s investment in Skylark reflects the potential it sees in the international market.
Wants to see state support
Orbach would like to see state support different from that which is currently offered in the biotech sector: “I would like to see the establishment of a large innovative pharmaceutical company, a kind of Israeli Novo Nordisk. It can be built by acquiring existing products, to create revenue and distribution channels, while developing new products, and we know that one successful product can lift such a company.
“True, we have Teva and it also has successful innovative products, but Teva is a generic company and not innovative in its DNA, and has not made a significant acquisition since Actavis, because of the trauma it caused it to undergo. So I say let’s start another company. But unfortunately there is currently no one to get it off the ground.”
