Extera Capital To Supply HC Expansion Funds

Extera Partners, a life sciences advisory firm based in Cambridge, Mass., recently created Extera Capital LLC to give late-stage companies a little extra lift. Through Extera Capital, it plans to provide $5 million to $10 million in expansion funds to companies with marketed products, or ones that will soon be ready for sale.

The firm hopes to exit investments in two to three years and make two to three times its money, said General Partner Jonathan Reis, founder of Extera Partners, which also has offices in Munich.

Extera Capital won't take technology risks, unlike most of its venture capital brethren, which accept the chance of product failure in exchange for a shot at big returns.

Extera Capital will provide equity and convertible debt, depending on the situation, Reis said. Instead of raising a venture fund, it will draw capital from a large, undisclosed European investor. There's no set amount committed to the venture effort.

As a result of its cautious approach, it probably won't fund many drug discoverers. More likely targets are medical devices, diagnostics, research tools and drug delivery. It intends to make four deals per year, and hopes to complete its first one in a few months, Reis said.

In addition to taking board seats, members of Extera Capital will assume management positions at portfolio companies. Typically, one member would join the board, and another would fill a management need. The hands-on approach is geared toward steering these companies to near-term results. "The idea is to be extremely involved with management," Reis said.

Before starting Extera Partners, Reis was involved in starting biotech lab equipment company Protein Forest Inc., which has raised backing from Boston Millennia Partners and S.R. One, among others; and Gelesis Inc., a developer of obesity drugs funded by a group that includes OrbiMed Advisors.

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