Jun. 6–Two Pittsburgh-based venture capital firms are still competing to win the remaining third of the $60 million in federal tobacco settlement funds the state has set aside for biotechnologydevelopment.
Saturn CPP and Birchmere Capital told the board they plan to be players in the region’s fledgling biotech industry with or without the state funding, said Richard Overmoyer, director of technology investment for the state Department of Community and Economic Development.
The board took no action on either of their proposals but is at liberty to give all of the remaining money — $20 million — to one of them or to split it between the two.
The board finalized agreements this year for $40 million of the tobacco funds with two other venture capital firms, each of which met the February deadline the state had set for contenders to raise private matching money. Those firms, Philadelphia’s Quaker Bioventures and Pennsylvania Early Stage Fund, of Wayne, Delaware County, both have said they want to invest in Western Pennsylvania. But members of the tobacco board seemed to be trying last year to commit a third of the total funding to each portion of the state.
Saturn had been selected as one of three firms bidding for the funds at that time, but missed the deadline. The board then reopened the bidding and Birchmere, which had not been a finalist in the earlier fund-raising round, returned to the competition.
Yesterday, Saturn told the board that it would secure commitments within the next 30 to 60 days for as much as $60 million, Overmoyer said. Saturn officials couldn’t be reached for comment, but Overmoyer said the firm hoped to raise up to $30 million from Barr Laboratories, a Pomona, N.Y.-based specialty pharmaceuticals maker with facilities in suburban Philadelphia and between $20 million and $30 million from the German state of Bavaria.
In partnership with California-based Bay City Capital, an established life sciences investment firm partially controlled by Chicago’s billionaire Pritzker family, Birchmere is planning to create a $150 million biotechnology fund, Overmoyer said.
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