A longtime medical investor’s private equity fund has closed to new investors and is ready to invest.
Bio-Star Private Equity Fund LLC, an Irvine-based medical technology investor, shut its first fund at $26 million last week.
Bio-Star general partner Michael Henson has been involved in startup funding of a dozen medical device companies. Bio-Star was founded three years ago.
The private equity firm tapped wealthy investors, mutual funds and companies to build the fund.
“The goal is to concentrate primarily on new cardiovascular devices,” Henson said. “I would say 75% on devices, 25% on biotech projects.”
Bio-Star targets early-stage companies, including ones at the university and inventor level, he said.
The private equity firm’s fund was kept small so Bio-Star can keep a close eye on its investments, and “to participate on a daily basis in the product development and operational activities of these new companies,” said John Lonergan, another Bio-Star general partner.
The idea for Bio-Star came about, Henson said, through a group of cardiologists involved in heart disease.
These cardiologists see new ideas, very early in development, and wanted to put together an investment fund to help inventors bring technology to the hospital as soon as possible, he said.
Henson founded MedFocus Fund LLC, an Irvine-based investor intended to speed development of new biomedical businesses, in 2001.
MedFocus launched with $22 million from Japan Asia Investment Co., a Tokyo-based venture capital firm, and a group of undisclosed private investors.
During his career, Henson’s participated in building more than a dozen medical device companies, including Endologix Inc., which is based in Irvine, and Radiance Medical Technologies, which combined with Endologix in 2002.
Irvine-based Vertelink Corp., another MedFocus investment, was sold to Minneapolis-based Medtronic Inc. a little more than a year ago.
MedFocus also has invested in Triage Medical Inc., an Irvine maker of pins and other medical devices for broken bones, and Devax Inc., which is based in Irvine and makes coronary stent devices.
Besides Henson and Lonergan, Bio-Star’s other top official is founding general partner Dr. Louis Cannon. He’s a cardiologist who heads the Cardiovascular Institute of Northern Michigan in Saginaw, Mich.
Though Bio-Star has just closed its new fund, it’s already made some investments.
In the fall it joined San Francisco-based Latterell Venture Partners in backing Norborn Medical Inc., a medical device company based out of Santa Clara.
Norborn is developing a device to combat chronic total occlusions, or blockages that are considered a major cause of failed angioplasty surgeries. Such blockages render some medical devices ineffective. An example: stents coated with drugs, which open blood vessels.
“If it’s totally blocked, then a catheter can’t get through that blockage to be treated, so the patient would go to bypass surgery,” Henson said.
Other investments include a pair of smaller Irvine-based medical companies: Onset Medical Corp., which is developing minimally invasive surgical products, and Triage, the MedFocus investment.
