Westlake Village BioPartners LLC, a venture capital firm incubating biotechnology companies, closed its third fund last month with an oversubscribed $450 million ready to deploy. The firm has raised $1.3 billion in total since its founding in 2018, an amount Westlake says is more than any other biotech firm in the greater Los Angeles area.
Its investors include large university endowments, pension funds and hospital systems. According to the fund’s managing directors, almost all the investors from Westlake’s previous two funds returned for stakes in the dozen companies this capital will fund.
Westlake operates as a biotechnology incubator, identifying therapies or molecules larger biopharmaceutical companies have put on the backburner, then acquiring such assets to build a company around. The company brings in talent and develops a product for about a year, then offers series A financing so the venture can grow a business model and scale its medicine.
One of those companies was Agoura Hills-based Acelyrin Inc., a biopharma drug accelerator that debuted on the New York Stock Exchange in May
with a $450 million initial public offering— one of the highest initial prices in this industry’s history.
“The beauty of our strategy, really, is it works regardless of market conditions,” said David Allison, a managing partner at Westlake. “This is a tough IPO market for biotech companies, but we’ve been able to demonstrate that our strategy is where we can bring companies public. We’ve also been successful in transacting a company through M&A in this market.”
The 101 Corridor has become a major biomedical hot spot. Westlake was the first private equity company aimed at biotech firms in the area, offering capital for expansive commercial real estate space needed for labs and pulling assets from Thousand Oaks-based biopharma giant Amgen Inc.
Westlake divides its portfolio between acquiring biopharma assets and investing in drug-development platforms.
“What we need to make a medicine is a robust, predictable process,” said Mira Chaurushiya, a managing director at Westlake. “As we’ve seen that space expand and gain traction, it is no longer an artisanal, bespoke science. It is something that is done with precise engineering.”
Westlake allows a tight three-to-four-year timeframe for its subsidiaries to produce a medicine from a platform. Approximately half of the dozen companies this new fund will support are based in the Los Angeles area.