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On September 20, pharmaceutical giant Eli Lilly (Indianapolis, IN) announced that it had created Lilly BioVentures, a venture capital (VC) group that will invest up to $75 million in early-stage biotechnology companies. Lilly is one of several pharmaceutical companies making venture capital investments in innovative life science businesses (see table). Pharmaceutical-derived venture capital initiatives offer emerging biotechnology startups not only much-needed financial support, but also expertise in the drug development business. But there is also an “ulterior motive” for such activities by pharma companies—to scout for the latest biotechnologies, which are essential for improving flagging pipelines and accelerating sluggish drug discovery timelines
The BioVenture fund is not Lilly's first foray into the venture capital arena. In January, Lilly created the $50 million e.Lilly Venture Fund to support startups with an information technology (“e-business”) focus. The BioVenture fund has a different focus, offering $2–5 million in first- and second-round funding for startups developing platform technologies to speed drug development. Pawel Fludzinski, a managing director of Eli Lilly BioVentures, says: “The decision to fund [a startup] is driven by scientific insight rather than financial returns...The success of the Fund will be measured by how excited our scientists get about the companies we support.”