December 31, 2014

Newsmakers May 30-June 12: Life science VC deals hit post-recession high

First-quarter venture-capital deals for life sciences companies were the strongest they’d been since the Great Recession started in 2007, with biotechnology and medical device companies raking in $1.4 billion nationwide.

The figure marked a 15 percent increase over the same period a year earlier.

The numbers came from a report released by PricewaterhouseCoopers LLP and the National Venture Capital Association.

SPONSORED CONTENT

Ways to thank a caregiver

If you have a caregiver or know someone who has been serving as a primary caregiver, March 3rd is the day to reach out and show them how much they are valued!

The $1.4 billion total came on 173 deals. Broomfield-based Accera Inc., which is developing therapeutic drugs for Alzheimer’s and Parkinson’s diseases, led the way among local companies with $5 million in venture capital, while Boulder-based Mosaic Biosciences Inc. pulled in $2.3 million for its work to create synthetic materials that support tissue regeneration.

Nationwide, biotechnology companies accounted for $1.1 billion through 112 deals, while medical device companies attracted $588 million in 61 deals.

Greg Vlahos, a life-sciences partner at PwC, said the bump early in the year was a good sign for a couple of reasons. For one, the second and fourth quarters historically have produced the largest investments in life sciences companies. For another, he said investors generally shy away from sectors with longer investment durations and higher capital requirements like biotech and medical device companies see.

“We’re continuing to see interest in these businesses, especially in the early stages of their development,” Vlahos said at the time. “Venture capital’s ability to monetize their earlier investments and source early-stage investments is a positive sign for ongoing investments in life sciences.”

UPDATE

Right on cue, second-quarter venture-capital investment in life sciences companies was the highest it’s been since the PwC series of reports began in 1995, with both biotech and medical devices seeing double-digit growth over the previous year.

Venture capitalists funded 195 deals in the second quarter worth $2.5 billion, compared to $2 billion on 197 deals in the second quarter of 2013. The average deal size cranked up as well, rising 26 percent year over year to $12.8 million.

Third-quarter life-science investment, however, cooled off despite still enjoying a year over year increase. PwC’s third-quarter report showed that there were 188 deals totaling $1.6 billion, compared to $1.5 billion on 192 deals a year earlier.

But Vlahos said he believes the overall environment for such deals remains strong, noting that 18 out of 23 initial public offerings in the third quarter were for life sciences companies.

Reporter Joshua Lindenstein contributed to this report.

First-quarter venture-capital deals for life sciences companies were the strongest they’d been since the Great Recession started in 2007, with biotechnology and medical device companies raking in $1.4 billion nationwide.

The figure marked a 15 percent increase over the same period a year earlier.

The numbers came from a report released by PricewaterhouseCoopers LLP and the National Venture Capital Association.

The $1.4 billion total came on 173 deals. Broomfield-based Accera Inc., which is developing therapeutic drugs for Alzheimer’s and Parkinson’s diseases, led the way among local companies…

Categories:
Sign up for BizWest Daily Alerts