Medical Devices Get Most Funding in Slow Stretch for VC: Mid-Year Results

 Norwalk, CT - July 14, 2008 - 2008-Mid-year results reveal that the last time the health care venture capital market experienced such a slow six-month stretch was the second half of 2005. During the six months ended June 30, 2008, based on deals with disclosed prices of $1 million or more, 208 health care venture capital deals were announced totaling $3.58 billion. The second quarter ended June 30, 2008 produced 105 deals totaling $1.66 billion.

Medical device companies captured an impressive share of the dollars and deals, as displayed in the following chart, which breaks out by sector the total number of deals and total amount of funding, for both the quarter and the first six months of the year.
 

Biotechnology and biopharmaceutical companies also continue to attract a major portion of the venture capital funding devoted to health care. "The downturn in funding and deal volume is, to some extent, a reflection of the broader markets, which presently feature uncertainty related to economic and regulatory forces," remarked Gretchen S. Swanson, Editor of Healthcare Corporate Finance News. "In addition, the current lack of demand for venture-backed IPOs is giving investors and entrepreneurs a reason to focus on intensifying efficiency and consider alternate strategic options for accessing capital."

"Investment in certain sectors of the health care market is being driven by the need for new technology that addresses the limitations of currently available treatment," commented Stephen M. Monroe, Managing Editor. "Companies with commercial-stage products and growth prospects are among the most desirable investment opportunities for venture capitalists."

The most active venture capital firms in the health care sectors during the first half of 2008 are listed below, with figures for both the quarter and the six months ended June 30. Number of investments refers to the number of times the firm contributed to a financing announced during the given period.