Biopharmas Dominate Third
Quarter Health Care Venture Capital Market, According To Healthcare
Corporate Finance News
NORWALK, CONNECTICUT – October 12, 2005 – During the third
quarter 2005, health care venture capital funding increased by more than
30%, compared with the year-ago quarter, according to Healthcare Corporate
Finance News. In total, $1.7 billion in venture capital was raised by 97
health care companies during the third quarter ended September 30, 2005.
Venture investing peaked during the first quarter, began to slow in the
second and tapered off a bit during the third quarter, as in previous years.
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| During third quarter 2005, the Biopharmaceutical sector
accounted for the greatest portion of health care venture capital invested,
with 25 biopharmas raising $613.8 million in venture funding, and followed,
but not closely, by Pharmaceuticals, with 14 companies raising almost $318
million. The Biotechnology sector, with 22 deals, and Medical Devices with
21 deals, each accounted for just under $300 million in funding. “Venture
funding of biopharmaceutical companies has increased simultaneously with
advancements made in the scientific research of genomics, proteomics,
proteins, enzymes, antibodies and phytochemicals,” noted Gretchen S.
Swanson, Associate Editor of Healthcare Corporate Finance News. “The health
care industry’s quest for more personalized medicine is also most likely
fueling investor interest in this sector.” Seven health care companies
closed rounds of $50 million or more each this quarter. Two pharmaceutical
companies, Triax Holdings ($77 million) and Perlecan Pharma ($52.5 million),
plus Cerexa, Inc. ($50 million), a biopharmaceutical company, closed their
first rounds of institutional funding. Four more biopharmas closed third or
later rounds: Replidyne, Inc. ($62.5 million), Affymax, Inc. ($60 million),
Speedel ($56 million) and Amicus Therapeutics ($55 million).
“Investors have not been swayed by the fickleness of the IPO market,”
commented Ms. Swanson. “Many private health care companies are securing
later rounds, and pharmaceutical companies continue to acquire biopharmas
and biotechs or their compounds.” Six firms represent the most active health
care venture capital investors of the third quarter ended September 30,
2005, based on participation in number of deals. Sprout Group, MPM Capital
and HealthCap each made five investments, while Sanderling Ventures, Delphi
Ventures and Johnson & Johnson Development Corp. each made four investments.
Others, including Domain Associates, OrbiMed Advisors and Quaker BioVentures,
each invested in three companies.
Healthcare Corporate Finance News (www.hcfnews.com) reports bi-weekly on
financial events in the fast-paced venture capital, private and public
equity, and merger and acquisition markets. This well-researched newsletter
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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