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Liver Roll-Ups? (Not the Deli Kind)

Merchant bank The Aethena Group aims to provide a new kind of resource to emerging and middle market companies that need a boost to get to a valuation level that supports investment by traditional investors. One field in need of such support, Aethena believes, is liver disease, which represents enormous untapped markets, but product risk associated with an evolving understanding of liver biology. Aethena hopes to offer strategic options to companies in this industry.

When Vernon Loucks, the past CEO and chairman of Baxter International Inc. , and his son David, a former investment banker, formed a new merchant bank, The Aethena Group, in December 2000, they initially looked to invest in niches in health care that were overlooked by the more established venture capital companies. Their goal was to provide a new kind of resource to emerging and middle market companies that needed a boost to get to a valuation level that would support investment by traditional investors. To this end, the Loucks assembled the equivalent of a consortium of angels, all well-seasoned executives from large health care product companies in all sectors—medical devices, pharmaceuticals, distribution, and services. Among them are Carter Eckert, the former president and CEO of BASF Pharma; Mike Mussallem, the chairman and CEO of Edwards Lifesciences Corp.; David Kessler, MD, the former commissioner of the FDA; Lance Piccolo, who ran Caremark International as chairman and CEO; and James Utaski, the former president of Johnson & Johnson Development Corp., among other experienced executives.

Aethena's founders decided that what was needed in the health care industry, wasn't so much a new venture fund—$100 billion...

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