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One of Australia’s longest-tenured VC firms will soon enjoy its best-ever return on a single investment, as the Myricx exit follows Novartis’s US$1.1 billion acquisition of London biotech startup Myricx Bio. Melbourne-headquartered firm will bank just over $300 million once the transaction clears in September, having first backed cancer treatment startup Myricx Bio during its late 2019 £4.5 million seed round.
How the Brandon Capital Myricx Exit Came Together
“We weren’t looking to sell the business, but [Myricx Bio had] been having some interactions with Novartis and then it just became apparent that they were very keen,” said founding partner Stephen Thompson. “The CEO [Mohit Rawat] said, ‘Well, do you want to buy it?’ and that’s sort of what happened. There was no bank involved.” This informal path to a deal makes the Myricx exit somewhat unusual for a transaction of this scale.
What Myricx Bio Actually Does
Founded and based in London, Myricx develops antibody drug conjugates, or ADCs, that target and attack cancer cells without the collateral damage typical of other cancer treatments like chemotherapy. The deal is significant for its size given Myricx Bio is still very much in its early stage: it does not have products in market and has yet to begin clinical trials.
Deal Terms Behind the Brandon Capital Myricx Exit
Novartis, a $440 billion Swiss pharmaceutical giant, came to Myricx with a non-binding offer in May. Beyond US$1.1 billion in cash, Novartis is on the hook for another US$400 million if Myricx Bio hits certain development milestones in the coming years, a structure that could push the total value of the Brandon Capital Myricx exit even higher over time.
How Myricx Bio Was Founded
Brandon Capital, a dedicated investment fund for biotech and life science startups, helped form Myricx Bio in 2019 after its London-based venture partner Roberto Solari met chemist Andy Bell and biologist Ed Tate while lecturing at London’s Imperial College. Impressed by their research, Solari pitched their scientific credentials to Brandon Capital’s partners. The firm went on to invest, and Solari acted as Myricx’s founding chief executive.
Fund Performance Tied to the Brandon Capital Myricx Exit
Brandon Capital invested in Myricx Bio’s seed round and its £90 million 2024 Series A. The former was via Brandon’s $210 million Fund Five and the latter through its $439 million Fund Six. Myricx Bio’s acquisition is Brandon Capital’s first realisation from either fund. Should the extra US$400 million bring the total sale price to US$1.5 billion, Thompson said this exit alone will return Fund Five and “most” of Fund Six.
Who Benefits From the Exit
That makes the Myricx exit a win not just for the firm but for its investors, which include super funds HESTA, Hostplus, Aware Super, as well as the Queensland Government’s QIC investment fund and CSL.
Brandon Capital’s Global Investment Approach
Unlike many of Australia’s big VCs, this firm does not have a mandate to invest only in Australian companies and founders. Thompson estimates half of investments in Fund Five go to overseas biotech and life science startups, a strategy that made the Myricx exit possible in the first place.
A Recovering Global Biotech Market
The global biotech and life science sector has endured gloomy years following the frothy pandemic days. Venture funding for biotech startups hit US$15 billion in 2022, followed by a dramatic slump to under US$5 billion in 2023. The fall in venture funding for Australian biotech startups was less precipitous but still significant, from $380 million in 2022 to $269 million in 2023.
Signs of Recovery Following the Brandon Capital Myricx Exit
“It seems that we’re sort of coming up out of that,” Thompson said of the market slump. “We’re seeing tremendous scarcity in capital still, but there are a few companies being bought, which is good, and there are selective companies getting listed on Nasdaq, which is also another good sign. So we’re renormalizing back to sort of healthy steady state.” Several U.S. biotech startups have listed this year, most notably Parabilis Medicines and Kailera Therapeutics, each raising well over US$600 million, while Australian listing activity remains more subdued.
Policy Concerns Clouding the Outlook
Biotech startups have raised the alarm over the Albanese Government’s proposed changes to Australia’s R&D Tax Incentive, which would cap eligibility at a company’s first ten years of operation. “Most of these companies take 15 years before a product can get launched, if not longer… To suddenly say, well, actually, we’re going to put an arbitrary time frame of 10 years on how long a company can collect the R&D tax credit, it’s just going to have a huge impact on the sector,” Thompson said. Even as the Myricx exit signals renewed investor confidence, this policy uncertainty could shape how sustainable that momentum proves to be for Australian biotech longer term.
