Frazier Healthcare Partners is expanding its investment activity, raising $830 million for its first fund dedicated to public life science companies. The targets? Small and mid-cap biotechs that are off the beaten path or recovering from a value-crushing setback.
California-based Frazier has invested in public markets since 2016 using cash from its private funds. Jamie Brush, general partner and portfolio manager, called the launch of a dedicated public fund “a natural evolution,” explaining that it will allow Frazier “to deploy more capital in that space, which we find highly attractive.”
After five years of investing in public companies, Frazier has identified themes from patterns of its successful bets that will guide how it chooses small and mid-cap stocks for its $830 million, long-only fund.
“These themes include situations where we can obtain confidential information under CDA, companies that are recovering from a setback and finding companies off of the beaten path. We have also focused on investments in therapeutic areas with a favorable FDA regulatory environment and where we believe value inflection can be achieved with a reasonable number of patients in clinical trials,” Brush said.
Frazier will shape the therapeutic focus of the fund around the interests of other public investors. As Brush put it, “certain therapeutic areas garner more attention from public investors, driving areas of portfolio focus, such as oncology and orphan diseases.”
The experience of investing in public companies has persuaded Frazier that there are synergies with its traditional focus on the private space. Brush cites Frazier’s recent involvement with Crinetics Pharmaceuticals as an example. Frazier invested $15 million in the publicly traded Crinetics over the summer. When Crinetics came to spinout nonpeptide targeted radiopharmaceutical drug candidates, Frazier co-founded and invested in the resulting private biotech, Radionetics Oncology.