VentureWire Lifescience, Friday, February 24, 2012

Caxton Advantage Co-Founders Launch Biotech Investor Valence Life Sciences

The investment team at venture capital firm Caxton Advantage Life Sciences Fund will now do business under a new banner: Valence Life Sciences LLC.

Caxton Advantage Life Sciences formed in 2006 as a joint venture between hedge fund Caxton Associates and Advantage Life Sciences. That year the firm closed on an undisclosed amount for its first fund, which it invested in companies such as Vivus Inc., a publicly held drug-maker.

The new entity, Valence Life Sciences, is an independent firm co-founded by the same two investors who founded Caxton Advantage: Eric Roberts and A. Rachel Leheny. The Valence team will also include the other two Caxton Advantage investment professionals: Jay Cecil and Scott Morenstein. Roberts, Leheny, Cecil and Morenstein will be managing directors of Valence.

The Valence team will continue the strategy pursued with Caxton Advantage. The partners seek privately held and small, publicly traded life sciences companies whose products have human clinical data.

The second investment Caxton Advantage made from its 2006 fund, for example, was in Vivus. In November of that year, Caxton Advantage led a $33.6 million PIPE, buying shares at $3.50. At the time, Vivus's obesity drug, Qnexa, had completed Phase II studies.

In 2008, Caxton co-led another PIPE for Vivus, a $65 million financing in which it bought shares at $7.77. Vivus shares climbed 77.5% on Thursday after a Food and Drug Administration advisory panel recommended approval of Qnexa. Shares closed Thursday at $18.73.

Caxton International Ltd. is listed in a Vivus regulatory filing as the company's top shareholder, with an 8.8% stake. That position includes shares held by Caxton Associates and Caxton Advantage, Roberts said. The breakdown of ownership between the two firms is undisclosed, he said.

The nine companies Caxton backed with its debut fund include biotechnology companies Gemin X Pharmaceuticals Inc., acquired by Cephalon Inc. last year; Corthera Inc., which merged with Novartis AG in 2010; and Anthera Pharmaceuticals Inc., which went public in 2009.

Roberts declined to discuss Valence's fund-raising plans. In March 2011, VentureWire reported that Caxton Advantage would look to raise $150 million or more for its next fund.

Valence, which has offices in New York and San Diego, said Bruce Kovner, who retired from Caxton Associates last year, would serve on its investment committee.

The firm also disclosed an advisory board that includes Peter Dolan, former chief executive of Bristol-Myers Squibb Co.; former Pfizer Inc. CEO Henry McKinnell; Francesco Bellini, former CEO of BioChem Pharma Inc.; and Dani Bolognesi and Robert Bonczek, the former CEO and chief financial officer, respectively, of Trimeris Inc.

http://www.caxtonadvantage.com