|
First Quarter Venture Capital Results Slip From Prior Highs,
According To Healthcare Corporate Finance News
Norwalk, CT - April 14, 2008 - During the quarter ended March 31,
2008, health care companies raised more than $1.9 billion in 103 deals with
disclosed prices. The Q1:08 dollar total represents about a 31% decrease
from the total committed in Q1:07-however, in that quarter, more venture
capital was invested in health care companies than any other quarter of the
past five years. The number of deals announced declined by 23% in Q1:08,
compared with the year-ago quarter.
|
|
Nearly 40% of the deals
announced had investment sizes of $20 million or more. The average deal
size for Q1:08 was $18.6 million, and the median, $15.0 million. The
largest deals announced in Q1:08 were all in the health care technology
sectors. Included among the largest capital commitments are some tranched
financings and some venture investments tied to other financing
instruments.
“Many investors are showing a
preference for companies with existing products, advanced product candidates
or plans to acquire or in-license assets, while others continue to support
early-stage enterprises,” remarked Gretchen S. Swanson, Editor of
Healthcare Corporate Finance News. “Furthermore, right now there
are more enticing exit opportunities through M&A than an IPO.”
Each of the three largest
deals is in the $60 million dollar range, with one announced in each month
of the quarter. In January, American Capital invested $66 million in Avalon
Laboratories, a supplier of disposable cardiopulmonary vascular cannulae.
Taligen Therapeutics announced a $65 million, six-tranche round in February
to help move its lead candidates into clinical development. In March,
TriVascular2 was formed with $65 million to acquire a subsidiary of Boston
Scientific, as well as certain intellectual property of its predecessor
company, TriVascular, Inc.
“With liquidity opportunities
lacking in the public equity markets, venture capitalists are likely
preparing to make additional investments in many of their portfolio
companies,” commented Stephen M. Monroe, Managing Editor. “However, in some
cases, it may be necessary to implement restructuring plans and cutbacks to
keep private, development-stage companies afloat in the currently unstable
financial markets.”
With 32 venture investments totaling $663 million in funding, the medical
device sector was the most active in health care during the first quarter,
with the greatest amount of funding (35%) and the most deals announced
(31%). Nearly 21% of the total dollars invested in health care during the
first quarter was committed to pharmaceuticals, while about 19% each went to
the biotechnology and biopharmaceutical sectors.
The most active venture
capital firms of the quarter, based on publicly announced transactions,
participated in four or more rounds. These firms are listed below. |
|
Strategic investors that
participated in deals during the quarter include Medtronic, MedImmune
Ventures, Safeguard Scientifics, Kaiser Permanente Ventures, Mitsubishi
Corporation, Novartis Venture Fund and Merck Capital Ventures.
Healthcare Corporate Finance News
(http://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.
Click here to get more information on any of our Publications.
Back to top |
