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Longwood Founders Fund: GSK provides the bucks, Westphal the guidance

Posted by Scott Kirsner  April 13, 2010 01:01 PM

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It was the biggest new VC fund to raise money in the first quarter of 2010 a shade over $50 million but no one is yet saying much about it. There's no Web site yet, and no timeframe for divulging much more, I'm told.

It's the Longwood Founders Fund, and the three partners are local biotech biggies Christoph Westphal, Michelle Dipp, and Rich Aldrich. Westphal and Dipp are Cambridge-based executives at GlaxoSmithKline, which acquired their company Sirtris in 2008 for $720 million; Aldrich runs RA Capital Management, the Back Bay investment firm.

But the new firm is a sponsor of today's Boston Biotech Business Development Conference in Cambridge, a long-running event that Westphal, Dipp, and Aldrich are involved in organizing, along with a handful of other local life sciences notables.

Several local venture capitalists tell me that Glaxo is a major investor in the new Longwood fund, but Westphal wouldn't confirm that today. The big question is that if Westphal is spending time scouting life sciences investments for the new fund, will he dial down (or suspend) his current activities within Glaxo, where he is both chief executive of Sirtris and a senior vice president of Glaxo's Centre for Excellence in External Drug Discovery? Before starting Sirtris in 2004, Westphal was an investor a Polaris Venture Partners in Waltham, and was also briefly chairman of the life sciences advisory board at Boston-based IDG Ventures (now Flybridge Capital Partners.) As an investor, interim CEO, and board member, Westphal also helped launch local biotech companies like Alnylam, Momenta, and Concert Pharmaceuticals.

Ansbert Gadicke, managing partner at MPM Capital in Boston, says he expects the Longwood Founders Fund to invest in one or two early-stage life sciences start-ups a year. "I could imagine that we'll probably wind up co-investing with them," says Gadicke. 

My expectation is that Glaxo may bring in a new CEO to run Sirtris at some point, freeing up more of Westphal's time to source new investments, assemble teams, and help companies begin the process of turning science into product. (Sirtris is still traveling that road, with several new drug candidates still in FDA Phase IIa clinical trials, despite a glowing feature on "60 Minutes" last year.) Gadicke says that giving Westphal a new set of responsibilities involving making investments a demonstrated strength of his "is a perfect way for him to stick around in a big company."

Glaxo spokesperson Mary Anne Rhyne told me yesterday that Westphal and Dipp remain employees of the company, but that she wouldn't comment as to whether Glaxo is an investor in the Longwood Founders Fund. Glaxo already operates a corporate venture capital fund of its own, Pennsylvania-based SR One, which got started back in 1985. 

Aldrich at RA Capital didn't respond to a phone call and e-mail yesterday. 

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Scott Kirsner was part of the team that launched Boston.com in 1995, and has been writing a column for the Globe since 2000. His work has also appeared in Wired, Fast Company, The New York Times, BusinessWeek, Newsweek, and Variety. Scott is also the author of the books "Fans, Friends & Followers" and "Inventing the Movies," was the editor of "The Convergence Guide: Life Sciences in New England," and was a contributor to "The Good City: Writers Explore 21st Century Boston." Scott also helps organize several local events on entrepreneurship, including the Nantucket Conference and Future Forward. Here's some background on how Scott decides what to cover, and how to pitch him a story idea.

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