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This article was prepared for the November 8, 2000 edition of U.S.

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Leschly at 60, in Venture Capital

Jan Leschly has been a larger-than-life figure since he and his family

moved to Princeton 20 years ago. In 10 years at Bristol-Myers Squibb

this one-time Danish tennis star moved from vice president to

president and COO. Then he went to SmithKline Beecham, where he was

CEO for six years, retiring earlier this year to make way for

SmithKline’s merger with Glaxo.

Now Leschly is the marquee name for a well-heeled life sciences

investment firm that is setting up shop at Princeton Overlook. Care

Capital LLC has $100 million to invest, and $90 million of this has

been supplied by just two New York-based institutions, Morgan Stanley

Dean Witter and Rho Management.

Leschly, 60, will be chairman and CEO of Care Capital. Working with

him is another SmithKline alumnus, John O. Parker Jr., former CIO of

SmithKline Beecham, and one young Wall Street whiz, David R. Ramsay.

Parker is a Harvard MBA who majored in mathematics at Bowdoin, Class

of 1966. He had been in charge of information management at Corning

and Baxter Healthcare, and — in the late 1980s, at Squibb. He had

also been senior vice president of Sea-Land Service, the ocean

shipping and global logistics unit of CSX Corporation.

Ramsay majored in mathematics at Princeton, Class of 1985, and has an

MBA from Stanford. At Morgan Stanley Ramsay did industrial leveraged

buyouts, and he was also managing director of Rhone Capital, a $350

million leveraged buyout fund. (The fund was named for its sponsor,

the largest private bank in Switzerland, which had a vault on the Rue

de Rhone in Geneva.) Ramsay is married to Beth Burrough, former

captain of Princeton University’s basketball team who is now executive

director of the E-commerce group at Johnson & Johnson; they have two

preschool children.

William D. Clark, a principal in the firm, had worked for

SmithKline

in London and in Japan. He went to Harvard and has an MBA from

Wharton.

Established as a private equity corporation, Care Capital opened in

early October in 2,500 square feet, a space that used to be

PaineWebber’s brokerage office at Princeton Overlook Center. "We are

just getting our legs under ourselves," says Ramsay.

Advice and investment are coming from other notable sources, namely

George Poste, a special limited partner. Former chief science and

technology officer at SmithKline, he is now CEO of Health Technology

Networks, an Arizona-based consulting group that studies the impact of

genetics and computing on healthcare R&D. Trained as a pathologist, he

teaches at the University of Pennsylvania, Cambridge University, and

University College in London. He is the chairman of the defense

department’s task force on bioterrorism.

Another limited partner is another SmithKlime alumna, Tamar Howson.

She is a high profile woman on the life sciences investment scene and

familiar to many in Princeton; she had been director of worldwide

business development and licensing for Squibb and vice president of

venture investments at Johnston Associates on Cherry Valley Road. Also

on board as a limited partner is Argeris ("Jerry") N. Karabelas,

current chairman of the Novartis BioVenture Fund.

Given the track record and the deep pockets of the principals, the

$100 million start-up money was not hard to find, says Ramsay. "The

big issue in starting a venture capital firm is how much time do you

want to spend fundraising. We went to two institutions and have $100

million." The partners contributed just $10 million of that figure.

"That is a lot to come out of the box with, and over time we will

build the firm," says Ramsay.

Should more money be needed, it is quite likely that the two principal

investors, Morgan Stanley and Rho, will be ready to ante up. "I am

very confident that if we need more money to do more deals, we will be

able to find it," says Ramsay.

"We are not really seeking more investors," says Parker. "The

strategic intent of this fund is to create superlative returns for the

investors."

The firm is located in Princeton at least in part because of Central

Jersey’s focus on life sciences. Steve Cohen of Morgan Lewis & Bockius

is the firm’s attorney, and the accountants are based in Manhattan.

Though Care Capital will consider New Jersey companies, its focus will

be health care investments in the United States and possibly in

Europe.

The partners caution that the new firm aims to make late stage or

corporate stage investments of between $5 and $50 million, with

preference given to the larger numbers. "Working with a small company

takes as much time as with a large company," Parker says. "We are not

really a seed money venture capital firm. Our concern is more the

company’s stage of development rather than the size of the company. We

won’t invest in a great idea that has not seen the light of day in the

market."

Care Capital’s focus on life sciences, Parker says, includes R&D

productivity tools such as genomic technologies. Likely investments

might be biotech firms that have passed the "proof of concept" stage

and know where they are going. The firm is also very interested in

E-health care and other ways to use innovative technology to make

health care more efficient.

"We see the changes in healthcare — the confluence of scientific

technologies — genomics, robotics, proteomics [protein expression]

and nanotechnology [technology on a molecular scale]. We see the

information revolution continuing and becoming more and more important

in the creation of healthcare solutions and the delivery of

healthcare. And we think we are in a unique position with the

relationships we have with a variety of individuals and firms," says

Parker. "We believe this is a huge opportunity."

"The bottom line is that we intend to be very active in the

investments we make. It is a value proposition — the experience we

can bring to bear in science, in understanding which companies are

interested in what areas in information technology, and in the

creation of financial arrangements that make sense. We have all those

bases covered. There is a lot of money out there but very few have our

connections," says Parker. "Small firms have a hard time getting

through the door and getting above the noise level."

Parker has no regrets about leaving a mega company to work in a small

office on Route 1. "It feels great," says Parker. "In a large company,

90 percent of your time is dictated by the machine, the projects, the

meeting. In a small company, 90 percent of your time you are making

the decision about how to spend your time. But this is very much a

fulltime-plus job."

— Barbara Fox

Care Capital, 100 Overlook Center, Princeton

Overlook Suite 102, Princeton 08540. David R. Ramsay, managing

director. 609-520-1973; fax, 609-520-9299.


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