LONDON GlaxoSmithKline is investing 17.5 million euros ($23.5 million) in a new venture fund to invest in drugs for rare diseases, underscoring the growing role of big drugmakers in backing start-up companies.
GSK and many of its rivals are becoming more active in funding early-stage companies, reflecting both a desire to tap into smart ideas from outside their own laboratories and a scarcity of finance from many traditional venture capital firms.
The new Kurma Biofund II fund, which has raised 44 million euros to date, is the first venture capital fund dedicated to financing innovation in the rare diseases field by working with a network of European research institutes.
The fund is being led by French firm Kurma Life Sciences Partners, with other investors CDC Entreprises, Idinvest Partners and New Enterprise Associates, the companies said on Thursday.
Rare diseases are a growing focus for drug companies, which can achieve high prices and make good profits from medicines that make a real impact on treating serious illnesses, even if only a small number of patients are prescribed the therapy.
In April GSK made a bigger bet in the venture capital field by partnering with Avalon Ventures in a deal worth up to $495 million to fund as many as 10 drug discovery start-up companies over the next three years.
(Reporting by Ben Hirschler; Editing by Greg Mahlich)