Third Rock Ventures raises $516 million fund

SAN FRANCISCO, March 25 Mon Mar 25, 2013 10:08pm EDT

SAN FRANCISCO, March 25 (Reuters) - Healthcare-oriented venture firm Third Rock Ventures said it had raised a $516 million fund, its third, even as healthcare investing endures something of a slump.

Investors have cooled on the sector due to factors including high regulatory hurdles, the long time frame for drug development and the lack of blockbuster initial public offerings for health and biotechnology companies.

Third Rock, founded in 2007 in Boston, said its latest fund would invest in up to 16 companies. The vehicle will focus on areas including diagnostics, therapeutics, information technology and data.

The firm's portfolio includes investments such as Lotus Tissue Repair, sold to Shire earlier this year in a deal that could reach $324.3 million if Lotus meets certain milestones.

Third Rock was founded six years ago in Boston. Its inaugural fund was $378 million, followed by a $426 million fund that closed in 2010.

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