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Biotech fundraising may be a slog, but the current market is highly investible, says Catalio Capital Management cofounder George Petrocheilos.

Why it matters: KKR-backed Catalio Capital Management raised $400 million for its fourth biotech fund this month.

Follow the money: Catalio has so far deployed capital to 16 companies, with an average check size ranging from $5 million to $25 million.

This interview has been edited for clarity and length.

 "It has been the hardest fundraising market that I've seen in the last decade. 

It was inflation, high interest rates, geopolitical uncertainty (and) market volatility."

"Of course, I ran into that. Everybody mentioned it."

So how did you convince investors to invest in fund four?

"We got a bunch of re-ups from most of our LPs because they said it makes a lot of sense to do your fund versus others, because you are the ones that have actually given us cash back."

Has the recent biotech slump changed your investing strategy?

"Yes. I find it one of the most attractive markets to invest in. That's why we've been so active with 16 investments already. We see this as a tremendous buyer's market opportunity."

Catalio's investment strategy relies on the scientific expertise of more than 45 accoladed academics. How does this approach help the firm?

"We're looking for that rare scientist entrepreneur who is not only the pioneer in his or her scientific field of expertise, but also knows how to successfully translate that basic research into commercial success again and again.

The thesis is that if they've been there (and) done that before, they know what good looks like, so they can do the second, third or fourth time with us."

Personnel and culture changes at the FDA are fueling fears that drug approvals will be delayed. Have your portfolio companies been affected?

"We haven't had any negative impact. We're just monitoring the situation very closely. It feels like business as usual."

🇬🇷 Fun fact: Petrocheilos was born and raised in Athens, Greece. 

He came to the U.S. to go to college at Johns Hopkins University, where he became excited about "the possibilities of basic research," he says.

Catalio's Petrocheilos: The biotech slump is a "buyer's market"

With a $400 million new fund, the firm has invested in 16 companies.

Photo illustration of George Petrocheilos next to a closeup photo of a microscope.

Photo illustration: Axios Visuals. Photo: Courtesy of Catalio Capital Management

Biotech fundraising may be a slog, but the current market is highly investible, says Catalio Capital Management cofounder George Petrocheilos.Why it matters: KKR-backed Catalio Capital Management raised $400 million for its fourth biotech fund this month.

Catalio's Petrocheilos: The biotech slump is a "buyer's market"

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