Set against a backdrop of barren biotech investment, Vivo Capital has secured $740m to back preclinical and clinical-stage life science companies.
The funds will be allocated in the latest cycle of the Vivo Opportunity Fund, an evergreen public pot that runs in three-year investment cycles. Unlike traditional funds with a fixed lifespan, evergreen investments occur over periodic intervals.
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US-based venture capital (VC) company Vivo Capital said the third cycle will follow the same strategy as the first and second, helping finance small- and mid-cap biotechnology and life science companies. According to the financial entity, the investments aim to “capture value from breakthroughs and clinical milestones,” as per a 7 May press release.
There are approximately $5.3bn in regulatory assets under management for Vivo Capital, with the business investing in 430 public and private companies globally since it was founded in 1996.
The Vivo Opportunity Fund has already catalysed a plethora of medicine development via biotech investments in its first two cycles. Verona Pharmaceuticals, for example, won US Food and Drug Administration (FDA) for its chronic obstructive pulmonary disease (COPD) treatment Ohtuvayre (ensifentrine) in June 2024.
Ohtuvayre has been earmarked as ‘transformative’ for the COPD space due to its innovative mechanism of action and limited gastrointestinal side effects. Geron Corporation, Avadel Pharmaceuticals, and Soleno Therapeutics were other companies highlighted by Vivo Capital as gaining FDA approvals for therapies in recent years.
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By GlobalDataIn addition, there are the Vivo Capital-backed biotechs that were acquired by big pharma companies in recent years. The largest was for radiopharmaceutical specialist RayzeBio, scooped up by Bristol Myers Squibb (BMS) for $4.1bn in 2023. Other deals namechecked by Vivo in the billion-dollar league include Novartis’ acquisition of Chinook Therapeutics for $3.2bn in 2023, GSK’s buyout of Sierra Oncology for $1.9bn in 2022, and Sanofi’s takeover of Kadmon for $1.9bn in 2021.
These signify that Vivo Capital has a knack for spotting biotechs with potential, with managing director Kevin Dai saying the firm “looks for the best opportunities across the entire healthcare spectrum”.
Dr Gaurav Aggarwal, also a managing director at Vivo Capital, said: “Vivo has been investing in healthcare and life sciences for almost 30 years, demonstrating consistency and supporting innovation across market cycles.”
The $740m secured by Vivo Capital comes during a lull in venture capital funding for the biotech scene. Cash has already been in short supply since the boom in 2020 and early 2021, though current macroeconomic pressures have accelerated the funding downturn. US President Donald Trump has also cut government-led funding schemes in the country, removing secondary investment mechanisms that many biotechs rely on.
A report by GlobalData demonstrated that biopharma drug company venture financing witnessed a 20.2% downturn in Q1 2025 compared to the same period in 2024. Funding only reached $6.5bn, shy of the $8.1bn invested in Q1 2024. Analysts state that this suggests a preference for investors to back later-stage companies with clinical data already on their books.
“Amid the ongoing macroeconomic uncertainty, venture capitalists are favouring opportunities with clearer routes to near-term revenue and market access over longer-horizon development risks,” said Alison Labya, business fundamentals pharma analyst at GlobalData.
GlobalData is the parent company of Pharmaceutical Technology.
