The veteran crew at Medicxi is back with a new $400M fund and an upbeat assessment of what’s coming

Bioregnum Opinion Column by John Carroll

No two biotech VC groups are exactly the same.

Each has its own specialty, each has its ideas about assets and platforms. And you can certainly place the experienced crew at Medicxi in the asset wing — with a special set of relationships with the top scientists in their own European sphere of influence in the startup world.

And now they have a new $400 million fund to keep going in exactly the same direction.

Co-founder Francesco de Rubertis — who decamped with a group of colleagues from Index Ventures to form Medicxi in 2016 — is taking the wraps off of Medicxi IV, which actually closed about six months ago.

So why wait?

Six months ago the whole industry was coming off of one monumental bummer of a 2022, as biotech was shaken to its core by a frigid public market, an M&A drought, a slate of clinical failures and a general woe-is-me attitude that tended to blight all involved. A $400 million fund would not have turned that sentiment around.

“2022 was really managing the portfolio to make sure that the entire portfolio would be financed beyond the storm,” says the VC. “That was 2022. For us, it’s easier because single-asset companies don’t need billions of dollars to be hedged. That is the beauty of the defensiveness of our model. So 2022 was, ‘Let’s make sure that all of the companies that we are doubling down on are covered to see through the storm.’ 2023 is: ‘Let’s lock in some exits now that the sunshine started to come on the other side of the ocean.’”

For de Rubertis, the proof is in the M&A pudding we’ve been seeing. When you start seeing M&A, he adds, that’s where the bottom is.

“When there has been extensive price adjustment is where pharmas’ decision makers … lock in,” he tells me in a preview of today’s news. “In the last nine months, we have sold three companies [the $2 billion Versanis deal, the preclinical Villaris — picked up by Incyte for $70 million cash and $1.36 billion in milestones — and MiroBio, which Gilead paid $405 million for.] The pharmas were waiting to optimize.”

They’re also not finished.

“We’re in negotiations on many things,” he adds happily.

So here’s one more reason to feel good about H2 and an improving 2024.

For Medicxi, the payoffs come on the success of a new drug project. They’re not big on trying to create transformative pipelines — with the exception of Centessa, which was put together from the pieces of many individual Medicxi projects.

They’ve also completed the biggest seed round in their history and wrote off a frank flop in Xenikos.

That’s a good record. Nobody bats 1000 in biotech investing, especially when you like to get things going with seed rounds. They have had plenty of ups and downs along the way. De Rubertis highlights a good dozen seed projects that never survived stealth. More will follow, as happens when you try to do important things in drug development.

For this deeply experienced team, the key to keeping things together is to maintain a steady series of funds in the $300 million to $400 million level every two or three years. And once again it meant bringing in familiar major investors like J&J and Novartis.

Medicxi is as predictable as it gets in biotech investing, and that’s been a reassurance to committed backers looking for growth in the year ahead.

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