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Flagship outlines plans to raise $3B for new fund

Flagship Pioneering is looking to raise $3 billion for its eighth venture fund, a sign the high-profile company creator continues to see investor interest in the biotechnology sector despite a turbulent market.

The plans were outlined in a securities document signed by Flagship’s chief financial officer Charles Carelli and filed with federal regulators Wednesday. Boston Business Journal earlier reported the news.

Based in Cambridge, Massachusetts, Flagship has launched a number of biotech startups this year, including Empress Therapeutics, Metaphore Biotechnologies and, most recently, Quotient Therapeutics. It closed its Fund VII in 2021, bringing in a little more than $3.3 billion for life sciences investing.

The firm declined to comment on Wednesday’s filing, citing Securities and Exchange Commission regulations.

Best known for building Moderna, Flagship lists several dozen companies in its current portfolio. The firm will create and incubate new startups in-house and typically launches six to eight of them a year. Twenty-five of its companies have gone public since 2013, according to the firm’s website.

Since closing its 2021 fund, Flagship has also struck a number of notable partnerships, including with Pfizer in July as well as with Novo Nordisk and the Cystic Fibrosis Foundation last year. It’s also expanded its geographic footprint with new hubs in Singapore and in the U.K.

This year, a slumping biotech sector and stagnant market for initial public offerings has made life difficult for young drugmakers. Flagship-backed companies haven’t been immune. Evelo Biosciences recently chose to dissolve one year after laying off dozens of employees, while two Flagship companies that previously went public, Seres Therapeutics and Sana Biotechnology, have restructured and reduced their workforce.

Though the weak market has forced companies to slash costs, the venture ecosystem remains “well capitalized,” according to the National Venture Capital Association’s PitchBook Venture Monitor. Last year, the association reported that venture firms across all sectors raised a record $163 billion.

Funds that make more traditional investments in young biotechs have raised large sums of capital this year, too including SR One’s $600 million fund and Canaan’s $850 million raise.

Ned Pagliarulo contributed reporting.

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