Sources inform ''Globes'' that the name of the winner of fourth tender: Pitango Venture Capital, founded by managing partners Nechemia (Chemi) Peres and Rami Kalish. The name is a surprise, since the firm, which manages $1.3 billion, already has extensive investments in the life sciences.
Pitango has chalked up a number of successful exits in the life sciences, including, in the past year alone, the sale of glaucoma treatment company Optonol to Alcon Inc. (NYSE: ACL) for $180 million; the sale of insulin delivery system developer Medingo Ltd. to Roche AG (SWX: RO) for $160 million, and the sale of heart-valve developer Ventor Technologies to Medtronic Inc. (NYSE: MDT) for $325 million. These exits strengthened Pitango's standing as Israel's top venture capital firm.
The $330 million Pitango V Fund, raised in 2007, has invested 18% of its capital in biotechnology and medical devices companies. Nonetheless, it apparently wants to expand. A few weeks ago, it won the government tender for the $50 million Al Bawader ("first buds" in Arabic) venture capital fund for Israeli-Arab start-ups, and it is reportedly considering setting up an investment fund in China with a local partner.
Three of the four biomed fund franchisees have been published: Orbimed Advisors LLC, through an Israeli team; 7 Health Ventures with San Francisco-based Bay City Capital; and Medica Capital with Oxford Bioscience Partners.
The source added the biomed funds are struggling to raise the capital they need, six months after the funds' four franchisees were announced. One of the franchisees is now considering withdrawing altogether. A decision will have to be made soon, as the tender set a November 2010 deadline for raising the $70 million stipulated for the funds.
The problem is not unique to Israel. Despite an increase in venture capital raised in the US in the first half of 2010, many firms around the world are struggling to raise follow-on funds.
Published by Globes [online], Israel business news - www.globes-online.com - on July 13, 2010
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