Roel Bulthuis, senior vice-president and managing director of Merck Ventures, the corporate venturing unit of Germany-based Merck, is preparing for his workload to increase again this year with at least a dozen new deals.
Bulthuis set up what was then called MS Ventures in 2009 and last year saw the evergreen strategic venture fund double to €300m ($320m) and broaden from a focus as one of the leading early-stage investors in the healthcare field to all areas of interest for the parent company.
Stefan Oschmann, chairman of the executive board and CEO of Merck, said: “As a leading science and technology company, innovation is vital for Merck. This is why in 2016 we expanded our existing biopharma venture fund to the total funding volume of €300m and to all our three business sectors – healthcare, life sciences and performance materials. And we added a fourth investment arm representing all businesses beyond our current portfolio. We consider Merck Ventures a key tool to access external innovation. Roel has been instrumental in building the fund and is the driving force behind it.”
Bulthuis, who reports directly to Oschmann, said he expected this year to make three to four new investments in each of healthcare, life sciences, performance materials and new business as well as working on three potential new Merck spinoffs.
In January, it invested in Medisafe’s $14.5m B round, its second investment in digital health, with its first investments in both the life sciences technologies and performance materials to be disclosed in the second quarter of this year.
This compares with four new investments during last year in Artios Therapeutics, where Merck was co-lead in the $33m A round, Artsavit, a company created in Merck’s Israel incubator and where the $6.3m A round was announced at the start of this year, Akili Interactive Labs’ $11.9m extension and iOmx’s $45m A round.
Each of the business sectors in Merck have dedicated funds. These funds have a starting capital of €50m and a target size of €100m evergreen, which, along with an existing fund, would take the total under management to €450m. Part of Merck Ventures is the Bioaccelerator Fund in Israel and the €30m Entrepreneur Partnership Program to fund spinouts from the parent company.
Bulthuis said: “We have made the spinoff efforts a fundamental part of all four funds, with the ability to commit up to 20% of our capital to these ideas.”
He added that, last year, “our portfolio of spinoffs that we created from Merck started to mature with major financing rounds for Asceneuron (Sfr32m ($32m) led by Sofinnova), Prexton (€30m led by Forbion) and ObsEva (raised [$97m] in a Nasdaq IPO)”.
Its other portfolio companies had similar successes with more than €260m in follow-on rounds and the sale in March 2016 of Padlock Therapeutics to New York-listed drugs company Bristol-Myers Squibb for up to $600m, including an initial $225m.
Padlock raised about $18m since inception in 2013-14 by venture capital firm Atlas Ventures and academics Paul Thompson and Kerri Mowen from a consortium including a series A round with Johnson & Johnson and Merck Ventures, later adding Index Ventures and GlaxoSmithKline.
Merck’s ventures team doubled from seven to 14 in the first quarter of 2016 and is expected to increase again this year, he added, and Bulthuis shifted his line management to report directly to Oschmann, who took over from Karl-Ludwig Kley.
Bulthuis has celebrated more than a decade at Merck, as prior to establishing its venture fund he was responsible for negotiating a range of licensing deals for subsidiary Merck Serono. Previously, he was director in the biotech investment banking team at Fortis Bank. Before joining Fortis, Bulthuis worked at Devgen in Belgium as a business analyst.
He has an MSc in biopharmaceutical sciences from Leiden University, and an MBA in finance from Helsinki School of Economics.