Merck KGaA has unveiled plans for a “strategic, corporate venture capital fund” which will invest in emerging biotechnology companies.

Specifically the Germany-based firm’s Merck Serono unit is establishing a fund to support biotech start-up companies “that have the potential to provide innovative products” in its core therapeutic areas. These include neurodegenerative diseases, oncology, autoimmune and inflammatory diseases.

The new entity, Merck Serono Ventures, will initially have a pot of up to 40 million euros to be invested over the next five years. Bernhard Kirschbaum, executive vice president of R&D at Merck Serono, said that "biotech start-up companies are an important element in scientific innovation” and the fund will give those firms “the opportunity to interact early on with our organisation”.

Vincent Aurentz, head of portfolio development at Merck Serono, said the creation of a venture capital fund “underlines our commitment to be best partner for biotech entrepreneurs and their investors”. He added that “this activity complements our toolkit of collaborative approaches to build a high-quality portfolio with our partners”.

News of the fund comes a couple of days after Merck placed bonds of 750 million euros, which are set to mature in September 2013. Observers believe the size of the debt financing suggests that a foray into the acquisition market could be forthcoming.

Merck is expected to complete its acquisition of the Norwegian fertility specialist Medicult shortly.