BioWorld International Correspondent

MUNICH, Germany - One of Europe's most fertile fields for biotechnology spin-offs just planted extra seeds for its future yields.

The European Molecular Biology Laboratory (EMBL) has been associated with a venture capital company - EMBL Venture Capital Partners GmbH, also of Heidelberg - since December 2001. It closed its second round of fund raising, gathering about €25 million for start-up and seed financing from investors across Europe.

"We had a positive surprise with this round," Edeltraut Guenterberg, one of three investment specialists with the company, told BioWorld International. The firm had set a €17 million goal for the closing, and "we are very happy that we were able to raise so much," she said.

"The market right now is not in a good situation," she said. "Investors are not prepared to place their money just anywhere. Our connection with EMBL is a very positive element. That certainly helped tip the scales in our favor."

The EMBL itself is an investor, joined by companies that include the European Investment Fund, of Luxembourg; 3i Group, of London; BankInvest Group, of Copenhagen, Denmark; and Marco Polo Investments, of Madrid, Spain.

EMBL Venture Capital Partners primarily will invest in newly established companies, and also will participate in follow-up financing rounds for firms it backs. "We are prepared to be co-investors, lead investors or even sole investors," Guenterberg said. The fund, she added, will focus on start-up and seed financing, investing from €100,000 to €1 million initially. The fund is planned to run 10 years.

To date, EMBL Venture Capital Partners has three companies in its portfolio, two of them spinouts from the EMBL. The first, Cenix BioScience GmbH, of Dresden, specializes in RNA interference technology. The second, which is not an EMBL spin-off, is febit AG, of Mannheim. The company is developing and manufacturing a benchtop microarray facility and aims for fully automated DNA analysis. The third, Hybricore GmbH, of Heidelberg, works to streamline the production of monoclonal antibodies and overcome the bottlenecks of MAb production in speed and throughput.

Guenterberg sees a role beyond investment for the fund. "The people we work with are often pure scientists," she said. "We help firms during their founding and afterward with many of the legal and business aspects. It's fundamental support."

On the other hand, the relative drought in capital markets over the past two years has made even pure scientists more business savvy. "We're definitely seeing more work on the business plans," Guenterberg said.

With at least seven spin-offs since 1997, the EMBL is one of Europe's most productive sources of new biotech companies. Its own venture fund will help plant still more seeds.