HEALTHCARE M&A FOR THIRD QUARTER 2007

FOR IMMEDIATE RELEASE
Stephen M. Monroe, Partner
Gretchen S. Swanson, Associate Editor
800-248-1668
203-846-6800
Fax: 203-846-8300
pressreleases@levinassociates.com

Health Care Venture Capital Investing Surges In Q3:07, According To Healthcare Corporate Finance News

Norwalk, CT - October 16, 2007 - Health care companies raised nearly $2.5 billion of venture capital funding during the third quarter ended September 20, 2007, based on 121 deals with disclosed prices. This activity represents a 10% increase in the number of deals announced, and a nearly 14% increase in total dollars committed, compared with the year-ago quarter. Both deal and dollar volume also posted a modest increase over Q2:07, but neither was quite as high as the record-breaking first quarter of this year.

Health Care Venture Capital Investments,
Third Quarter Ended June 30, 2007
Sector
Number of Deals
Dollar Amount, in millions
Medical Devices
34
$622.65
Services & Other
8
$503.00
Biopharmaceuticals
20
$472.54
Pharmaceuticals
21
$390.50
Biotechnology
26
$358.15
e-Health
12
$106.30
Total
121
$2,453.14

“In recent months, an abundance of capital available to health care companies, coupled with effective exit opportunities in the M&A market, has been stimulating activity in the venture capital market, while the public market continues to provide liquidity events for shareholders,” commented Stephen M. Monroe, Senior Editor.

The medical device sector was the most active in terms of both deal flow and dollar volume during third quarter 2007, with 25% of the quarterly dollar total for all sectors combined. The second-largest deal of the quarter, a $110 million Series E financing for Globus Medical, a developer of spinal implant systems and biomaterials, was led by Clarus Ventures. Neuromed Pharmaceuticals, a biopharma developing drugs for chronic pain, announced the largest deal among pharma, biopharma and biotech companies, with a $53.3 million Series E financing led by MPM Capital.

“Venture capitalists are investing in opportunities to bring to market new technology and intellectual property, as well as new ways to put existing patents to use, or improve upon existing products,” noted Gretchen S. Swanson, Editor.

Two deals boosted quarterly results significantly in the health care services sector, including the largest deal of the quarter, the $290 million round that XLHealth, a company engaged in disease management and related health care services, secured from investors including MatlinPatterson Global Advisors and GS Capital Partners. Solantic, an operator of walk-in urgent care centers in Florida, secured $100 million—the third-largest health care venture capital transaction announced in Q3:07—from Welsh, Carson, Anderson and Stowe. Three deals announced during the quarter were made in connection with an acquisition, one to launch a joint venture start-up, one to fund a spin-in and one for a spin-out that resulted from a separate acquisition.

The most active venture capital investors for the quarter, based on firms that made three or more deals, are presented in the chart below.

 

Most Active Health Care Venture CapitalFirms,
Third Quarter 2007
Investor
Number of Investments
HBM Partners
5
BDC Capital
5
Sofinnova
4
Skyline Ventures
4
Novo A/S
4
MPM Capital
4
Domain Associates
4
BB Biotech
4
Versant Ventures
3
Ventures West
3
SGAM
3
Polaris Venture Partners
3
OrbiMed Advisors
3
Novartis Venture Fund
3
New Science Ventures
3
Montreux Equity Partners
3
Life Sciences Partners
3
InterWest Partners
3
HLM Venture Partners
3
GrowthWorks Capital
3
Atlas Venture
3

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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