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New name, new investment strategy at Quaker Partners

The region’s largest life-sciences venture-capital firm has shifted its investing emphasis away from biotechnology and changed its name to reflect that.

Quaker Partners Management LP, which is one of the Philadelphia-based Independence Capital Partners family of private-equity funds, has changed its name from Quaker BioVentures Inc.

The new name more accurately depicts the investment strategy Quaker was laying out when it was raising its second fund more than three years ago, said P. Sherrill Neff, who co-founded the firm along with Brenda Gavin and Ira Lubert.

“The way we think of it now is we are consciously diversified among four major sectors in healthcare,” Neff said. The sectors are pharmaceuticals, which includes biotechnology; medical devices; clinical diagnostics and life-sciences tools; and health-care services.

Quaker also is investing in fewer very early-stage companies than it used to, focusing more on companies that have their products or services on the market or are close to getting them there.

“I don’t want to say [Quaker’s second fund] is a later-stage fund, because it’s not,” Neff said, “but it’s more balanced with a good sampling of later-stage investments.”

Quaker isn’t alone in changing its focus. Other life-sciences venture-capital firms are investing less in early-stage companies that are developing drugs or medical devices and for the same reasons: the amount of time the Food and Drug Administration takes to approve the companies’ products, if it approves them at all; and the difficulty in getting insurers to pay for the products once they’re on the market.

“We have actively lobbied very hard for the FDA to make the approval process more transparent, more predictable and more efficient,” said Emily Mendell, the vice president of communications for the National Venture Capital Association.

A survey of more than 150 venture-capital firms conducted for the NVCA found that 39 percent of them have decreased their investments in life-sciences companies over the last three years and the same percentage expect to decrease their investments in life-sciences companies even more over the next three years, some by more than 30 percent. Only half as many venture firms have increased their investments in life-sciences companies and/or expect to increase their investments in those companies, according to the survey.

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Kristen Fitch

Senior Director, Marketing