Pfizer puts neuroscience at heart of new $600M VC fund

Pfizer has committed $600 million to its VC fund. The Big Pharma is setting aside 25% of the money for investments in neuroscience startups, giving it a way to continue participating in the field despite its retreat from in-house R&D.

The plan gives Pfizer Ventures more cash overall and significantly more for investment in neuroscience. Pfizer used to spend $50 million a year on its venture wing, an approach it said made Pfizer Ventures equivalent to a $250 million private fund. Now, Pfizer is making $600 million available and calling out particular therapeutic areas for the first time.

Pfizer will invest around $150 million in neuroscience startups, with most of the remainder going to companies working in its core therapeutic areas. The singling out of neuroscience marks a shift in strategy, which previously made no mention of particular therapeutic areas or commitments to spend certain amounts in them, opting instead for a broad focus on drugs, platforms, diagnostics and technologies.

The new approach follows Pfizer’s decision to retreat from internal neuroscience R&D at the start of the year. Pfizer swung the ax on the unit, affecting staff at sites in Massachusetts and Connecticut, in the face of "continual setbacks" and recognition its work was failing to translate into breakthroughs.

Those struggles persuaded Pfizer it wasn’t best placed to perform neuroscience R&D but fell short of dispelling its interest in the field or belief that other teams can do better. As such, Pfizer outlined plans to step up its VC investments in neuroscience, leading to the unveiling of the $600 million fund and $150 million commitment to the therapeutic area.  

"By changing the way we invest in neuroscience, we hope to support an energized community of biotech entrepreneurs who are progressing the understanding of the molecular mechanisms of neurologic diseases and help advance potential treatments for people with neurological conditions," Denis Patrick, Ph.D., managing partner of Pfizer Ventures, said in a statement.

Pfizer has picked out neurodegeneration, neuroinflammation and neurometabolic disorders as the early areas of focus for its new neuroscience-skewed investment strategy. That maps onto Pfizer’s activity in the sector to date, which has given it a portfolio featuring companies such as Aquinnah Pharmaceuticals, Cortexyme and MindImmune.

In other regards, Pfizer is sticking with the strategy that has served the fund to date. Pfizer Ventures will continue to make around 80% of its investments in the U.S. and commit up to $10 million when it first invests. 

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