For struggling startups, now might seem like an awful time to raise money and launch a company. Not so for Clovis Pharmaceuticals, a Boulder, Colorado-based outfit focused on acquiring, developing, and commercializing oncology products. The company just completed a first round of venture capital that gave it $145 million — the largest venture financing this year. It helps that Clovis’ management team has a track record, being made up of the former top brass at Pharmion, which Celgene acquired in 2008 for $2.9 billion. Not surprisingly, Clovis’ venture backers largely consist of the venture investors that financed Pharmion.

 

The establishment of Clovis comes in one of the worst financing environments in the history of the industry—and that’s a good thing for the company. It will likely mean that Clovis has more opportunities from companies that have discovered promising molecules without the resources to develop them. At the same time, they will likely find less competition in acquiring or partnering around those molecules than they might in times when capital is more accessible.

 

“There’s a significant need for this type of company in almost any financial circumstance because the discovery abilities of our industry have really exceeded the development capacity of our industry,” says Patrick Mahaffy, president and CEO of Clovis. “That being said, we come into an environment being exceptionally well capitalized when so many other companies are struggling with their financial circumstances and companies that may have wanted to be or poised to be or had been an acquirer, or buyer, or partner of rights, have backed away.”

 

Mahaffy says one of the big advantages of the company’s business model is that once Clovis gains the rights to a molecule or enters a partnership, it can handle all aspects of development and commercialization on its own. “I’d be uncomfortable in this environment, or any environment, where there’s a shrinking number of pharma companies if I knew that at some point, I was going to have to turn that drug back over to an organization for commercialization,” he says.

 

Brian Atwood, managing director of Versant Ventures, which participated in the financing, says the fact that Clovis is well-heeled will make it attractive to companies seeking partners or buyers of molecules. “If you are able to demonstrate that you’ve got the financial resources to carry a molecule from wherever it is to market, it just makes life a lot easier,” he says.

 

The big attraction for Atwood, however, was the management team, which he got to know through his investment in Pharmion. “The first principal, the guiding principle for the venture business—certainly for our firm is to find great management teams,” says Atwood.

 

In addition to Mahaffy, the Clovis team includes Chief Medical Officer Andrew Allen, Executive Vice President of Regulatory Affairs and Technical Operations Gillian Ivers-Read, and Chief Financial Officer Erle Mast. All served in the same roles at Pharmion, which Mahaffy founded in 2000. 

 

In addition to Versant, investors in Clovis include Domain Associates, New Enterprise Associates, Aberdare Ventures, Abingworth, Frazier Healthcare Ventures, ProQuest Investments, and the company’s management team. With the exception of Frazier Healthcare Ventures, all had been investors in Pharmion.