Merck, a US-based drugs company, will invest C$6.8m ($6.9m) in AmorChem, a Canada-based life sciences venture capital fund, just days after setting up its own corporate venturing unit.
Merck last year agreed to invest C$100m over five years in research and development in Quebec, a province of Canada.
The majority of the C$41.25m AmorChem fund will come from Investissement Quebec and FIER Partenaires (a Quebec government-sponsored fund) as well as C$8.25 in total from companies, such as Merck.
The Quebec government last year set up Real Ventures as a C$50m fund for high-tech startups and provided Cycle Capital with C$41.5m last month for the clean-tech sector.
Louis Lacasse (pictured), manager of AmorChem along with Élizabeth Douville, Inès Holzbaur, Martial Lacroix, Nicola Urbani and Maxime Pesant, told news provider Montreal Gazette: "We’ll be investing in technologies, rather than companies, in order to avoid investing in expensive infrastructure and having to hire managers.
"We’ll fund them to the point when they can be tested on animals or humans, and then we’ll sell it, or license it to a pharmaceutical company.
"For example, if we have four different molecules that can be used to treat migraines, then we could put together a migraine company, so that if one fails, you have the others to work on. It diminishes the risk."
Lacasse said the fund would finance about 40 projects over the next five years.