Third Quarter Most Active Yet In 2008 For Health Care Venture Capital, Reports Healthcare Corporate Finance News

FOR IMMEDIATE RELEASE Stephen M. Monroe, Partner
Gretchen S. Swanson, Associate Editor
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Third Quarter Most Active Yet In 2008 For Health Care Venture Capital, Reports Healthcare Corporate Finance News

Norwalk, CT - October 9, 2008 - Quarterly results show that the third quarter ended September 30, 2008 has been the most active quarter of the year so far for the health care venture capital market. There were 107 venture capital transactions with disclosed prices that were publicly announced during Q3:08, totaling roughly $2 billion.

Both the total amount of funding and the total number of deals exceed the tallies for the two preceding quarters. But, compared with the year-ago quarter, the total amount of health care venture capital funding raised in the third quarter of 2008 is down 19%—and compared with Q3:06, it’s down by 8%. The market is still ahead of where it was in third quarter 2005; Q3:08 displayed a 19% increase in funding and a 10% increase in number of deals, compared to Q3:05.
 
Health Care Venture Capital Investments,
Third Quarter Ended September 30, 2008
 
Sector
Number of Deals
Dollar Amount (in millions)
Medical Devices
32
$525.80
Biotechnology
18
$468.20
Pharmaceuticals
19
$430.43
Biopharmaceuticals
18
$347.60
e-Health
12
$158.85
Health Care Services & Other
8
$93.31
Total
107
$2,024.19
“After a slow first half of the year, venture capitalists invested more in health care companies during the third quarter, and there are still funds with plenty of capital to deploy,” noted Gretchen S. Swanson, Editor of Healthcare Corporate Finance News. “But the year-end totals for 2008 are not likely to be as robust as the two preceding years.”

“Debt has become more expensive and the public equity markets are closed to many, and as a result, the environment for health care companies seeking financing is likely to be more challenging in 2009,” said Stephen M. Monroe, Managing Editor. “But ongoing activity in the health care M&A market, particularly the technology sectors, may be boosting the confidence of venture capital investors.”

The most active venture capital firms, based on the number of investments announced in the health care sectors during Q3:08, are listed below.
Top Health Care Venture Capital Investors, Q3:08
Firm
Number of Investments
Frazier Healthcare
6
MPM Capital
6
Flagship Ventures
5
Mitsubishi funds
5
InterWest Partners
4
BDC Capital
4
Clarus Ventures
4
New Enterprise Associates
4
SV Life Sciences
4
Skyline Ventures
4
Three Arch Partners
4
Versant Ventures
4
 

Medical device, biopharmaceutical, biotechnology and pharmaceutical companies continue to attract a greater share of health care venture capital dollars than e-health, services and other health care companies. Venture capitalists continue show interest in technologies and services that improve patient outcomes, increase efficiency, enhance the delivery of care and address large, defined markets.

Healthcare Corporate Finance News 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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