First Quarter Venture Capital Results Slip from Prior Highs,
According to Healthcare Corporate Finance News
NORWALK, Conn. (Business Wire EON) April 14, 2008 --
During the quarter ended March 31, 2008, health care companies raised
more than $1.9 billion in 103 deals with disclosed prices. The Q1:08
dollar total represents about a 31% decrease from the total committed in
Q1:07—however, in that quarter, more venture
capital was invested in health care companies than any other quarter of
the past five years. The number of deals announced declined by 23% in
Q1:08, compared with the year-ago quarter.
|
Health Care Venture Capital Investments, First Quarter
Ended March 31, 2008
|
|
Sector
|
|
Number of Deals
|
|
Dollar Amount
(in millions)
|
|
Medical Devices
|
|
32
|
|
$663.20
|
|
Pharmaceuticals
|
|
16
|
|
$400.32
|
|
Biotechnology
|
|
24
|
|
$360.54
|
|
Biopharmaceuticals
|
|
16
|
|
$358.85
|
|
Health Care Services
|
|
7
|
|
$81.60
|
|
e-Health
|
|
8
|
|
$52.90
|
|
Total
|
|
103
|
|
$1,917.41
|
Nearly 40% of the deals announced had investment sizes of $20 million or
more. The average deal size for Q1:08 was $18.6 million, and the median,
$15.0 million. The largest deals announced in Q1:08 were all in the
health care technology sectors. Included among the largest capital
commitments are some tranched financings and some venture investments
tied to other financing instruments.
“Many investors are showing a preference for
companies with existing products, advanced product candidates or plans
to acquire or in-license assets, while others continue to support
early-stage enterprises,” remarked Gretchen S.
Swanson, Editor of Healthcare Corporate
Finance News. “Furthermore, right now
there are more enticing exit opportunities through M&A than an IPO.”
Each of the three largest deals is in the $60 million dollar range, with
one announced in each month of the quarter. In January, American Capital
invested $66 million in Avalon Laboratories, a supplier of disposable
cardiopulmonary vascular cannulae. Taligen Therapeutics announced a $65
million, six-tranche round in February to help move its lead candidates
into clinical development. In March, TriVascular2 was formed with $65
million to acquire a subsidiary of Boston Scientific, as well as certain
intellectual property of its predecessor company, TriVascular, Inc.
“With liquidity opportunities lacking in the
public equity markets, venture capitalists are likely preparing to make
additional investments in many of their portfolio companies,”
commented Stephen M. Monroe, Managing Editor. “However,
in some cases, it may be necessary to implement restructuring plans and
cutbacks to keep private, development-stage companies afloat in the
currently unstable financial markets.”
With 32 venture investments totaling $663 million in funding, the
medical device sector was the most active in health care during the
first quarter, with the greatest amount of funding (35%) and the most
deals announced (31%). Nearly 21% of the total dollars invested in
health care during the first quarter was committed to pharmaceuticals,
while about 19% each went to the biotechnology and biopharmaceutical
sectors.
The most active venture capital firms of the quarter, based on publicly
announced transactions, participated in four or more rounds. These firms
are listed below.
|
Top Health Care Venture Capital Investors, Q1:08
|
|
Firm
|
|
Number of Investments
|
|
InterWest Partners
|
|
6
|
|
Kleiner Perkins Caufield & Byers
|
|
6
|
|
New Enterprise Associates
|
|
6
|
|
Polaris Venture Partners
|
|
6
|
|
Domain Associates
|
|
5
|
|
Versant Ventures
|
|
5
|
|
Fidelity Biosciences
|
|
4
|
|
MPM Capital
|
|
4
|
|
Sofinnova Ventures
|
|
4
|
Strategic investors that participated in deals during the quarter
include Medtronic, MedImmune Ventures, Safeguard Scientifics, Kaiser
Permanente Ventures, Mitsubishi Corporation, Novartis Venture Fund and
Merck Capital Ventures.
Healthcare Corporate Finance News (http://www.hcfnews.com)
reports weekly on financial events in the fast-paced venture capital,
private and public equity, and merger and acquisition markets for health
care companies, and provides subscribers with access to a searchable
online database of health care venture capital deals. This monthly
newsletter and weekly email update is published by Irving
Levin Associates, Inc., a leading financial publisher and source of
market intelligence since 1948. For more information, please call
1-800-248-1668.
* To receive this press release via email, send a message to pressreleases@levinassociates.com.
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