On the Fabric of the Human Body in Seven Books: this is the name of the magnum opus, published in 1543, of anatomist and physician Andries van Wezel, who broke with the norms of his time by dissecting corpses himself during his lectures (rather than having a surgeon do it). As was common for academics at the time, he Latinised his name and became Andreas Vesalius.

“The name itself actually explains the raison d’être of the fund,” says Fabienne Roussel, talking about Vesalius Biocapital, the firm where she is a partner and which was named for the famous roll-up-his-sleeves anatomist.

“It’s always been dedicated to biotech and biopharma,” she says about the fund. Or, really, funds: each of the firm’s four funds is independent and has a different management company. The first one dates back to 2007 and closed at €89m; the second raised €110m; the third €120m. The fourth and current fund has a target of €150m and, on 29 June, announced a first closing of €95m.

With a team of three managing partners, two partners, two principals and additional back office personnel--spread across offices in Luxembourg, Lisbon, Paris and Brussels--Vesalius Biocapital invested in around 10 companies in their last fund (the third). For the fourth, the portfolio is still wide open.

What do you look for in a portfolio company?

“As long as there is an unmet medical need, and the company can actually significantly contribute to that unmet medical need, then it’s of interest,” says Roussel, who, with a PhD in pharmaco-toxicology, comes herself from a scientific background. “No limitation, no focus on [for example] oncology or antibiotics--we’re really open.”

“But we are European,” she adds, stipulating that candidates should be strongly anchored in Europe (startups coming to Europe from elsewhere are also considered). After highlighting portfolio companies in Portugal and Finland, the partner comments that around half of the investees are nevertheless from the Benelux region and Germany. “[We have] very good connections here, very good knowledge of the market and regulatory processes.”

As for the preferred development stage, Roussel avoids the totality of labels: “Sometimes it gets into some kind of alphabetical war: is it series A, B, C…?” (A and C have a clear border, she explains, but A and B, B and C, maybe not.) Rather, the firm wants startups that are “close” to the clinical trial stage, or, in the case of healthtech companies, those that have a CE mark or FDA validation, also a sign of closeness to being market-ready.

What’s your interaction level with your portfolio companies?

Roussel and her colleagues like to have a hand in their startups’ development (“we do request board seats”), and tend to invest after having built a relationship with the founders, which means that the potential for a good business relationship is probably another factor in the previous question.

“The path to what we believe is the development that will lead to an exit… might not be the one initially thought about by the founders,” she says, stressing their collaborative approach.

“[Our] team has the potential to contribute to every single step of the company’s development,” she adds, highlighting in-house expertise in science and biotech, intellectual property, tech transfer, valuation, market knowledge and exit strategies.

As an example she mentions one portfolio company, Portugal-based Sword Health, whose founders initially had a stepwise approach to expanding within Europe. “We pushed them to go straight to the US, where they actually exploded,” says Roussel. “Through our guidance, they went straight to their biggest market.”

What’s your biggest challenge and opportunity right now as a VC firm?

“We feel the pain of fundraising fully,” says Roussel in response to this question, mentioning the “really tough” environment and echoing the answers from  in this article series. The partner reports that industry indicators are optimistic about the market getting back on track, and that the forecast for exits is better than, say, at the end of 2022.

“The biggest challenge for us is definitely not deal flow,” she says, in summation. “It’s finding co-investors and finding funds, simply put.”

Asked about opportunities, the partner talks about the recent news that Vesalius Biocapital’s fourth fund is up and running, with the European Investment Fund as a notable investor. With €95m secured already, the fund has been launched, though Roussel notes that they want to raise some €55m more. They plan to invest in 10 or 12 companies with that money over the next three to four years.

“Since the publication [of the fund] has come out, we’ve come on a lot of radars--we’re getting opportunities right and left,” she says, adding that, given the fundraising environment, this is naturally a little more exciting for Vesalius Biocapital than it is for the companies themselves. “Very competitive,” she notes.

How has Luxembourg’s health tech sector been evolving?

Roussel reports that her firm has been following the growth of this sector, locally, for quite some time. “And it’s finally happening,” she says, referencing its new levels of maturity.

Vesalius Biocapital participates in the Fit 4 Start acceleration program (run by Luxinnovation) as jurors and coaches, though doesn’t yet have any Luxembourgish portfolio companies. “They’re very young in their development,” she says of the hometown digital health and healthtech startups. In other words, a little too young for the VC firm’s investment strategy.

That could change, however: “It’s a market that we’ll be looking into even more deeply than we had in the past, because things are finally moving… the environment’s maturing.

“And that’s really, really great,” she adds.

A few portfolio companies and exits to highlight?

—Sword Health, a digital physical therapist from Portugal that uses sensor technology to deliver real-time feedback (“we’re on a mission to free two billion people from pain,” says the company website). “We believe in the thesis, in the business plan they have developed,” says Roussel.

—Forendo, a pharma company from Finland that has develoved a drug to treat endometriosis. It was acquired by Organon in 2021 for $954m. “Very successful investment,” comments Roussel.

—Rejuvenate Biomed, a drug company focused on treating age-related diseases from Belgium. “We’re following them very closely.”

—Scenic Biotech, based in Amsterdam and which is developing therapies for certain illnesses using genetic modifiers. “A very interesting one,” says Roussel. The company announced in March 2022 that it had closed a round of $31m in financing.