Venture Capitalists Invest Record Amount in Health Care in Q1:07, According to Healthcare Corporate Finance News

FOR IMMEDIATE RELEASE
Stephen M. Monroe, Partner
Gretchen S. Swanson, Associate Editor
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Venture Capitalists Invest Record Amount In Health Care In Q1:07, According To Healthcare Corporate Finance News
NORWALK, CT — April 11, 2007—Venture capitalists invested $2.8 billion in health care companies during the first quarter ended March 31, 2007—more funding than we have ever recorded for a single quarter. Total health care venture capital spending increased by more than 26% during Q1:07, compared with the year-ago quarter, as well as the third and fourth quarters of 2006, each of which saw $2.2 billion raised. There were 134 deals with disclosed prices announced during Q1:07, with the six largest deals each in excess of $60 million.

Health Care Venture Capital Investments, 
First Quarter Ended March 31, 2006
Sector
Number of Deals
Dollar Amount (in millions)
Biopharmaceuticals
23
$727.4
Medical Devices
43
$726.1
Pharmaceuticals
19
$660.4
Biotechnology
27
$392.9
Health Care Services
9
$197.1
e-Health
9
$52.3
Other
4
$48.0
Total
134
$2,804.2


The two largest deals of the quarter, both announced in March, were the $175.0 million round raised by EUSA Pharmaceuticals and the $110.0 million round raised by CardioNet. The third-largest deal of the quarter, a $70.0 million round, was announced by Targanta Therapeutics in February. “Right now, it appears that the health care venture capital market is poised for another record year of fundraising,” commented Gretchen S. Swanson, Associate Editor.
“Biopharmaceutical companies raised more than twice as much funding as they did during the first quarter of 2006, and for the first quarter of 2007, accounted for more than 26% of the total capital raised,” continued Ms. Swanson. Most of the biopharma deals were larger, too, with only a handful of rounds for less than $10 million. Biotechnology saw the greatest change in number of deals, with ten more announced during the first quarter of this year than last year, but a lesser total amount invested.
Medical device, pharmaceutical and biotechnology companies continue to draw a substantial portion of overall venture capital investments, and big pharma, biotech and other major health care companies continue to show an appetite for new technology and product candidates. “Mergers and acquisitions continue to provide many venture-backed companies with an exit event that satisfies investors,” noted Stephen M. Monroe, Senior Editor. “Venture capitalists are looking for opportunities to address large markets or unmet medical needs, particularly in the technology sectors of health care, and seeking
out product candidates in the later stages of development.” he continued. Health care services companies are also expected to attract more funding this year than they have in the past.
The top venture capital firms for the first quarter of 2007, based on participation in four financings or more, are listed below.

Top Health Care Venture Capital Investors,
First Quarter 2007
Investor
Number of Investments
Alta Partners
8
Canaan Partners
6
Sofinnova Ventures/Sofinnova Partners
6
ARCH Venture Partners
5
Domain Associates
5
Pequot Ventures/Capital
5
New Enterprise Associates
5
Novartis BioVentures/Novartis Venture
5
Three Arch Partners
5
Versant Ventures
5
Advent Venture Partners
4
Asset Management Company
4
Bay City Capital
4
Frazier Healthcare Ventures
4
Novo A/S
4

 

Healthcare Corporate Finance News (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.

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