OrbiMed has announced that it has raised $1.86 billion in capital commitments for its fifth Royalty and Credit Opportunities Fund, which is designed to support healthcare companies focused on growth.
The fund drew participation from a broad group of investors, including medical institutions, university endowments, foundations, pension systems, sovereign wealth funds, and family offices. According to OrbiMed, more than 90% of the capital committed to the new fund came from investors with whom the firm already had long-standing relationships.
This fifth fund will be used to provide “tailored investment solutions” to healthcare companies. These solutions, as outlined in the release, include financing mechanisms such as non-dilutive credit and royalty-based funding. The fund will be directed toward supporting biopharmaceutical companies, manufacturers of medical devices, diagnostic firms, and healthcare service providers that operate with the use of technology.
Matthew Rizzo, who serves as General Partner at OrbiMed, addressed the relevance of this fund within the broader financial landscape of the healthcare sector. He described the equity markets for biotech and life sciences companies in recent years as “challenging.” In a formal statement, Rizzo said, “Our flexible, non-dilutive capital solutions can help our portfolio companies to grow and thrive despite these volatile market conditions.” He also said the OrbiMed platform is structured to provide support for healthcare innovation and business growth across global markets.
OrbiMed, which is headquartered in New York, currently lists 134 biopharmaceutical companies in its portfolio, according to information available on the firm’s website. The firm has recently participated in a number of healthcare-related financings. These include a $54.5 million seed financing round last month for Renasant Bio, a company that focuses on kidney disease, and a $75 million private placement of shares for Verastem Oncology, which took place in April.
The announcement of this new fund comes at a time when equity markets have presented obstacles for companies in the biotech and life sciences industries. Rizzo linked the fund’s focus on non-dilutive capital to these market conditions, indicating that companies may be looking for alternative funding options that do not require giving up equity.
In the release, OrbiMed stated that the purpose of the Royalty and Credit Opportunities Fund V is to provide financial solutions that are adapted to the needs of healthcare companies across a range of subsectors. While the release did not provide detailed plans for how the $1.86 billion will be allocated, it underscored the firm’s intention to continue funding healthcare businesses through investment structures that align with their specific growth strategies.
This fund launch follows another significant capital raise in the same sector. Last week, Frazier Life Sciences announced that it had secured $1.3 billion in capital commitments for its twelfth venture fund, which will focus on private and early-stage biotech companies.
