January 2006 issue
Year-End Total: An Avalanche Of Deals - The Venture Capital Ball Kept On
Rolling Through December 2005
Last year, a big one for health care venture
capital, investors shifted more attention towards biopharmaceuticals as
biotechnology matured.
...
Catering To An Emerging Subsector, A New
Company Aims To Build The Backbone Of Better Spine Care
Including one investment announced in December, a handful of deals highlight
one subsector of health care that may be poised for growth.
...
Public Equity Market
Although there were four health care IPOs priced during December, there were
no stellar performers; secondary offerings were plentiful.
...
Mergers and Acquisitions
The largest deal of the month may not be that interesting until the winning
bidder is announced, but the health care M&A market did see some action from
the Far East.
...
Private Equity Market
An entity that resulted from a strategic merger last year is starting this
year as a biotech that two major pharma players bought stock in.
...
Notes & Briefs
...
Key Contacts
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News Read the past
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Companies Mentioned in this issue:
January 2006
123Multinova p8
3i Group p8
A
Abgenix p5, p6
Adams Harkness p4
Adams Respiratory Therapeutics p4
Adams Street Partners p7
Aeterna Zentaris p5
Affymetrix p2
Allion Healthcare p5
Altana, Inc. p10
Amarin Corporation p10
Ambion p5
American Academy of Pediatrics p12
American Journal of Clinical Nutrition p12
American Pain Management p9
Amgen p5, p6
AmProtein p6
AMR—American Medical Response p4
AngioChem p8
Animas p5
Antisoma plc p11
Applied Biosystems p5
Arbor View Retirement p5
Asthmatx p7
AstraZeneca p6
Atherogenics p6
Atlantic Shores Hospital p5
Atlas Ventures p8
AVANIR Pharmaceuticals p10
Axial Biotech p1
AxioMed Spine p9
B
Ballast Point Ventures p8
Banc of America Securities p4
BB Biotech Ventures p7
BDC Venture Capital p7, p8
Berna Biotech p5
Bespak plc p5
Bio*One Capital p8
BioCryst Pharmaceuticals p10
BioElectronics Corp. p11
BioFund Management p8
BioGenetics Capital p8
Biophan Technologies p5
BioPro Pharmaceutical p6
Biopure Corporation p11
Bioscience Managers p8
Biotechnology Value Fund p10
Biovertis AG p8
Boston Scientific p5, p6
British Medical Journal p12
Brookdale Senior Lvg. p5
Brookside Capital p2
C
Canaccord Capital p11
CardioMEMS p8
Caretek Medical p8
Cargill Ventures p8
Celladon Corporation p7
Cellartis p8
Centene p5
Center for Change p5
Cephalon p5
CepTor p11
Ceragenix p11
China Development Industrial Bank p7
China Development Industrial Bank p7
China Hospitals, Inc. p4
Chiron p8
CHL Medical Partners p8
CHN Solutions p5
CIBC World Markets p4
Citigroup Global Markets p3
Clarus Ventures p4
Clinquest Group p8
CoGenesys p2
CollaGenex p5
CollaGenex Pharmaceuticals p10
Consolidated Services p5
Corphealth p5
CorSolutions Medical p5
Credit Agricole Private Equity p8
Crestview Capital p11
Crucell p5
CSK Venture Capital p2
Curacyte p8
Cutter Laboratories p12
Cynosure p3
Cytogen p11
D
Dawson James p11
Desjardins Venture Capital p7
Discovery Laborator. p5
Division of Infectious Diseases p12
dj Orthopedics p5
Domain Associates p7
Domain Associates p4
Domain Public Equity Partners p10
Domantis p7
Duska Therapeutics p11
E
EBRx, Inc. p5
Egan Managed Capital p8
Elekta p5
Eli Lilly p2
EmCare p4
Emergency Medical Services Corporation p4
Emeritus Assisted p5
Enterprise Venture Partners p7
EntreMed p5
Essex Woodlands Health Ventures p7
ESun Bank Group p7
F
Federated Kaufmann p10
First Albany Capital p11
Food and Drug Administration p12
Fort Mason Capital p10
Friedli Corporate Finance p8
Fubon Financial Holding p7
Fusion Capital p11
G
Gastrotech Pharma p8
Genentech p8
Generex Biotechnology p11
Genetronics Biomedical p11
Genzyme p5
GlaxoSmithKline p2
Global Med Technol. p11
Global Strategic Investments p7
Global Venture Capital p8
Go Equity p8
Goldman, Sachs p4
Guidant p5, p6
Guilford Pharmaceuticals p6
H
Halozyme Therapeutics p10
HBM BioCapital p7
HCA, Inc. p12
Health Benefits Direct p11
Health Fitness Corp. p5
HealthCalc.Net p5
HealthExtras p5
HighRoads p8
Hoana Medical p8
Hopp Family p8
Human Genome Sciences p2
Humana p5
Hunter Wise Securities p11
Hunter World Markets p11
HVL, Inc. p5
Hypnion p8
I
ImaRx Therapeutics p8
Immtech International p11
Indevus Pharmaceut. p5
Innovative Spinal Technologies p9
Inovio AS p11
Inovio Biomedical p11
Intercell p8
J
J.P. Morgan Securities p4
JAIC America p7
Jefferies & Company p3
John Deere Health Care p5
Johnson & Johnson p5, p6
Johnson & Johnson Development p7
JPMorgan p4
K
Kaiser Permanente p12
King Systems p5
Kleiner Perkins Caufield & Byers p7
Kleiner Perkins Caufield and Byers p10
KuDOS Pharmaceuticals p6
L
LAB International p11
Larkspur Capital Corporation p7
Laureate Pharma p5
Leerink Swann p10
Light Sciences Corporation p7
Light Sciences Oncology p7
Lpath Therapeutics p8
Lurie Investments p7
M
MacroChem p11
Magellan Health p5
Management Technology Resources p9
Matria Healthcare p5
Maverick Capital p2
MC Life Science Ventures p7, p8
MDS Capital p7
Medical Intelligence GmbH p5
MEDTEC, Inc. p5
Medtronic p8
Merck p2
Merrill Gardens p5
METabolic Explorer p8
MicroIslet Inc. p11
MicroMed p11
Miikana Therapeutics p5
Military Vaccine Action Committee p12
Millennium Biologix p11
MMV Financial p7
Molecular Pharmacology p5
Montreux Equity Partners p4
Morgan Stanley p4
MPM Capital p4, p8
MSBi Capital p7
MYOTECH p5
N
National Autism Association p12
National Gulf War Resource Center p12
National Imaging p5
NeurogesX p8
New Science Ventures p7
Newmed p5
Nexmed Medical p6
NGN Capital p8
NimbleGen Systems p8
Noble International Investments p11
Nomura Research & Advisory p7
Nomura Securities p7
Novartis p8
Novo A/S p7
Novo Nordisk p7
Nucryst Pharmaceuticals p4
O
Oculir p8
Oncolytics Biotech p11
Onset Ventures p8
Oppenheimer & Co. p11
Optimer Pharmaceuticals p7
OrbiMed Advisors p9
Oriental Union Chemical p7
Osiris Therapeutics p8
Oxford Technology 4 VCT p8
P
Pacer Health p5
PainCare Holdings p11
Pelias Biomedical p8
Perlegen Sciences p2
Pfizer p2
Piper Jaffray p4
Primus Pharmaceuticals p10
Priority Pharmacy p5
ProMetic Life Sciences p11
ProQuest Investments p7
Protalix p8
Psychiatric Solutions p5
Purdue University p12
Q
QOL Medical p8
Quintiles PharmaBio p8
R
RBC Capital p11
Replication Medical p9
Resolvyx p8
Response Biomedical p11
Roaring Fork Capital p8
Rodman & Renshaw p11
Roper Industries p5
S
Salix Pharmaceuticals p5
Sanderling Biomedical Venture Capital p8
Sanders Morris Harris Group p6
SansRosa Pharmaceutical p5
Santhera p8
Savacor p5
SB Life Science Ventures p7
Scandinavian Life Science Ventures p7
SCO Securities p11
Senior Housing Properties Trust p4
Senior Resource p5
SG Cowen p10
Skyline Ventures p8
Smith & Nephew p4
Somaxon Pharmaceuticals p3
Southern Assisted Living p5
Southpark Community Hospital p5
Southpoint Capital Advisors p10
SpinalMotion p9
SpineMark p1, p8
SpineVision p8
St. Cloud Capital p11
St. Jude Medical p5
Sun Healthcare Group p4
T
T.R. Winston p11
Taiwan Global Fund p7
Targacept p6
Targanta Therapeutics p5
Techno Venture Management p8
Texas Back Institute p9
Texas Pacific Group Ventures p10
The Management Company p4
The Wellcome Trust p2
Thomas Weisel Partners p4
Tokio Marine & Nichido Fire Insurance p7
Tomophase p8
TVM p8
U
UBS Securities p3
Ulthera p8
Unilever Technology Ventures p2
UnitedHealth Group p5
Universal Health p5
UOB JAIC Venture Bio Investments p7
Upstream Capital Partners p8
Upstream Partners p1
US Script p5
V
Valera Pharmaceuticals p6
Vanguard Ventures p7
Venrock Associates p7
Venrock Partners p8
Ventures West p7
Vical p11
Viking Systems p11
VirtualScopics p11
W
Willows on Main p5
Wyeth p5
Wyoming Behavioral p5
Z
Zeneus Holdings p5
Ziff Brothers p8
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Year-End Total: An Avalanche Of Deals - The Venture Capital Ball Kept On
Rolling Through December 2005
Email this Editor
The size of the health care venture capital market grew to more than
$7.2 billion in 2005, including 441 deals with disclosed prices, according
to preliminary results from Irving Levin Associates, Inc.
Biopharmaceuticals accounted for the greatest amount of venture capital
invested in a single sector, with nearly $2.1 billion committed during the
year, based on 102 deals with disclosed prices. Medical Devices and
Pharmaceuticals each accounted for approximately $1.4 billion in venture
capital. There were 97 investments with disclosed prices in Medical
Devices, and 70 in Pharmaceuticals. Biotechnology secured nearly $1.3
billion in 86 venture capital transactions. Investor interest is shifting
somewhat, away from the development of biotechnology itself, toward what
can be developed using biotechnology—i.e., biopharmaceuticals.
The biopharmaceutical sector includes companies targeting and
developing therapeutics based on proteins, antibodies and other biological
substances, as well as compounds developed from microbial, mammalian and
plant cell cultures. The more traditional pharmaceutical sector includes
those companies focused on developing therapeutic compounds sourced from
naturally occurring, as well as synthetically derived chemicals.
The other 86 health care venture capital transactions we recorded
during 2005 include consultants, software/IT and e-Health companies, and a
variety of health care services and health care business services
providers. A few of the largest deals of the year were in this group, one
each in Hospitals, Long-Term Care and Managed Care.
There was no shortage of investment activity during the last month of
the year, either. During December 2005, venture capital investors
committed nearly $522 million to 34 health care companies, based on rounds
with a disclosed amount. Nearly two-thirds of the health care venture
capital raised during the month was by biopharmaceutical and biotechnology
companies, including the largest deal of the month.
Just a few days before the New Year, Perlegen Sciences, Inc., a
biotech with backers including Maverick Capital, Eli Lilly & Co.
(NYSE: LLY), Unilever Technology Ventures, CSK Venture
Capital and Brookside Capital, announced it had secured $50
million. Pfizer, Inc. (NYSE: PFE)—the sole investor in Perlegen’s
fourth round as a private company—is now a 12% stakeholder in the Mountain
View, California-based biotech.
Perlegen specializes in the analysis of millions of unique genetic
variations in the DNA samples obtained from clinical trial participants;
this information is used to explain and predict the efficacy and adverse
effect profiles of prescription drugs. The capabilities Perlegen has for
searching out genetic markers that can be used to predict patient
responses allow this company to help mitigate some of the risks and
challenges, financial and clinical, inherent in late-stage drug
development. Additionally, Perlegen is using its technology to discover
genetic variants associated with disease for potential new therapeutics
and diagnostics.
We would not be surprised to see this company enter the public market
this year, especially since Pfizer has agreed to purchase, at Perlegen’s
election and subject to certain conditions, up to an additional $25
million of Perlegen stock—in the event that Perlegen executes an initial
public offering within the coming year. Since being spun out of
Affymetrix, Inc. (NASDAQ: AFFX) in 2000, Perlegen has raised
approximately $254 million in venture financing, and has arranged
partnerships with Merck & Co. (NYSE: MRK), The Wellcome Trust,
GlaxoSmithKline (NYSE: GSK) and others.
Speaking of spin-offs, also during December Human Genome Sciences,
Inc. (NASDAQ: HGSI) announced its decision to spin off its
CoGenesys division, which was created in the first quarter of 2005.
The new company is intended to focus on the early development of selected
gene-based product opportunities and the monetization of certain of HGSI’s
intellectual property and technology assets. HGSI’s decision, however, is
contingent on a successful completion of CoGenesys funding by no later
than May 31, 2006. CoGenesys already has an employee base and
infrastructure in place as well as an experienced early development team.
Although HGSI agreed to provide CoGenesys with a start-up loan of $10
million, to be repaid in cash or equity at HGSI’s option, CoGenesys is
expected to secure most of its funding from sources other than the parent
company. Headquartered in Rockville, Maryland, Human Genome Sciences has
a pipeline of protein and antibody drugs. The biopharma is directed
toward large markets that have significant unmet medical needs. HGSI may
be doing just the right thing at the right time, given the current heat of
the venture capital market in Biopharmaceuticals, the recent alignments
among big pharma players with companies in this sector and the maturing of
the biotechnology market.
Clarus Ventures, a new life sciences venture capital firm with offices
in Cambridge, Massachusetts and South San Francisco, California, certainly
has the sector within its sights—and $500 million in commitments, at the
closing in early December of its inaugural fund. Clarus will invest its
first fund primarily in United States-based biopharmaceutical and
specialty pharmaceutical companies with products in development at value
inflection points in their life cycles. Although Clarus will invest up to
$50 million per company, its targeted investment size is about half that.
Especially if the firm invests as part of a syndicate, we may see Clarus
involved in some large deals as it begins to pursue opportunities in early
2006. The founders are a team of six individuals with experience in
investing in these sectors of health care, as well as in research and
development, commercialization, business development and operations
management at a global level, including involvement with Novartis, Inc.
(NYSE: NVS), Venrock Partners, MPM Capital and Genentech
(NYSE: DNA). |
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