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Flagship Pioneering Raises $824 Million for Biotech Growth Fund

Flagship Pioneering Raises $824 Million for Biotech Growth Fund

(Bloomberg) -- Flagship Pioneering Inc. said it has raised $824 million from investors that it will use to provide more funding to some of the small biotechnology and health companies it has helped found.

The firm, which focuses on medical biotech and agricultural life sciences, says it operates differently from traditional venture-capital firms. Instead of looking externally for new ideas, it starts small companies in-house, employing scientists and physicians to come up with promising new ideas. After two or three years, it spins out the most promising ones, and Flagship retains a majority stake.

The money from the new fund will be used to support more advanced companies in the firm’s portfolio, said Flagship Chief Executive Officer Noubar Afeyan. The additional funding will help the companies take drugs and other products into the more advanced stages of development and testing on their own.

The $824 million is the largest pool of money that Cambridge, Massachusetts-based Flagship has raised to date, according to the firm. Called the Special Opportunities Fund II, it will complement a separate pool of $700 million that was raised in late 2017 and early 2018 that is being used to fund earlier-stage companies at Flagship, he said. Flagship says it has formed more than 100 companies since 2000.

Investors in the new fund weren’t disclosed, but include existing limited partners, and new institutional investors and family offices have contributed, according to the firm.

Four companies that Flagship founded have gone public in the last 12 months, including Moderna Inc., which is working on personalized cancer vaccines. Moderna raised more than $600 million when it went public in December, making it one of the most successful biotech IPOs ever. The stock is down about 12 percent since then. Rubius Therapeutics Inc., another Flagship company, went public in July. Its shares have lost 29 percent since the IPO.

--With assistance from Rebecca Spalding.

To contact the reporter on this story: Robert Langreth in New York at rlangreth@bloomberg.net

To contact the editors responsible for this story: Drew Armstrong at darmstrong17@bloomberg.net, Mark Schoifet

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