UK-based medical endowment Wellcome Trust is creating a £200m ($300m) investment company to invest in start-up biotechnology companies.
The company, temporarily called Sigma, will focus on UK and European transformational technologies with potential for high returns over at least a decade.
Nigel Keen, chairman of public technology companies in the healthcare and electronics industries, including Oxford Instruments, Laird, Bioquell and Deltex Medical, will be chairman of Sigma.
Martin Murphy (pictured), previously a partner at venture capital firm MVM Life Science Partners where he led its European deals such as PregLem and Heptares Therapeutics, will be chief executive of Sigma.
Wellcome has been increasingly active in its direct equity investments as a quasi-corporate venturing unit having been formed out of its share ownership of the drug company that has since become GlaxoSmithKline.
In December, Wellcome said it had raised its venture and growth capital holdings to 19% of its £13.6bn investment portfolio and posted a 17% return in 2011.
Glyn Edwards, interim chief executive of the BioIndustry Association, said: "The Wellcome Trust’s decision to launch a fund focussed on long-term investment in biotechnology start-ups should provide a significant boost to companies developing new medicines. Given the time required to bring innovative healthcare developments to market, it is especially pleasing to see that the fund will take a long term view and provide companies with the support they need to reach their full potential."