January 2008 issue
Recent Discovery
Spawns Venture Funding--
RNA Interference Offers Basis For Therapeutic Development
One fairly recent biological discovery drew more attention from scientists
and investors in 2007.
...
Annual Venture Capital Results Shine--
Quarterly Results Slightly Lackluster, But Add To Strong Finish
In the health care venture capital market, 2007 was the fifth year in a row
that total funding and deals increased.
...
Mergers & Acquisitions
The health care M&A market continued to produce deals at a rapid pace during
2007, but did not break the record.
...
Venture Capital Funds
Two venture capital firms closed funds recently, including one that finished
raising its debut fund.
...
Venture Capital Transactions
December 2007 was slower than some months,
but still helped bring the year to a strong close.
...
Disintegrating Devices
Among the companies drawing in venture dollars recently are some developers
of bioabsorbable technologies.
...
Private Placement Market
Annual results of private placement activity support the idea that the
market for these deals is expanding.
...
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News Read the past
headlines.
Companies Mentioned in this issue:
January 2008
A
Abingworth Management p3
Adams Respiratory Therapeutics p6
AEA Investors p16
Alma Lasers p4
Alta Partners p1, p9
Ambion p3
Amvex Corporation p16
Anesiva p9
Alnylam p2
Applied Biosystems Group p3
ARCH Venture Partners p9
Ardea Biosciences p15
Arterial Remodeling Technologies p12
Ascendis Pharma p16
Ascension Health p9
Ascension Health Ventures p9
Asuragen p3
B
Bankinvest p2
BG Medicine p4
Bioabsorbable Therapeutics p12
Blue Cross and Blue Shield Association p4
Broadpoint p9
Brookside Capital p12
C
Camulos Capital p12
CardioMEMS p16
Carnegie Institution of Washington p3
Cequent Pharmaceuticals p3
Cerberus Capital Management p12
Chemokine p4
CIBC World Markets p4
Citigroup Global Markets p4
City of Hope p3
Clarus Ventures p16
Consorta p16
Cord Blood America p15
Cougar Biotechnology p13
Cowen and Company p13
Credit Suisse Securities p4
Cyclacel Pharmaceuticals p13
D
DaVita p16
deCODE Genetics p9
Deutsche Bank Securities p4
Devax p4
Dicerna Pharmaceuticals p3
Domain Associates p1
DW Healthcare Partners p11
E
Eisai Co. p6
Elixir Pharmaceuticals p4, p9
Essex Chemis AG p12
EUSA Pharma p12
Exalenz Bioscience p15
F
Ferrer Freeman & Company p11
Finistere Ventures p12
Fortis Securities p9
Frazier Healthcare Investors p3
G
Gilde Healthcare Partners p2, p16
GlaxoSmithKline p6
Goldman, Sachs p4
Growth Capital Partners p3
Guggenheim Partners p16
H
Health Watch p6
hysicians Dialysis, Inc. p11
I
Illumina, Inc. p9
Integra Ventures p12
IntraBiotics Pharmaceuticals p15
Isis Pharmaceuticals p2
ITX International Equity p12
Ivivi Technologies p4
J
Jaguar Acquisition Corp. p6
Johnson & Johnson Development Corporation p3
K
Kingsbridge Capital p13
L
Lazard Freres p13
Leerink Swann p13
Lehman Brothers p6
Lifeline Systems p6
LSP p3
M
Matignon Technologies p12
McLaren Healthcare Corporation p11
MedAssets p4
Medsciences Capital p3
Merck & Co. p2
Merrill Lynch & Co. p9
Merrion Pharmaceuticals p4
MGI Pharma p6
Midtown Partners p15
Migdal Insurance Company p15
Morgan Stanley p4, p12
MorphoSys AG p6
MVC Capital p16
N
National Venture Capital Association p9
Nephros p4
NeurogesX p9
New Smith Financial Products LLP p12
NewSmith Asset Management p12
Novare Surgical Systems p16
Novartis p6
Novartis Ventures p3
Novo A/S p2
O
Ohio Medical p16
OncoMed Pharmaceuticals p6
Oracle p4
Oxford BioMedica p3
Oxford BioScience p3
P
Pacific Growth Equities p9
Pelikan Technologies p16
Pequot Capital Management p12
Perry Baromedical p16
Pfizer p3
Piper Jaffray & Co. p4
Popular Securities p4
Precision Therapeutics p4
Prizma p15
Prometheus Laboratories p4
Prosensa Holding p3
PTV Sciences p3
R
Raytel Cardiac Services p6
Reckitt Benckiser p6
Regulus Therapeutics p2
Reliant Renal Care p3
Reliant Renal Care, Inc. p11
Respironics p6
REVA Medical p12
Ribopharma p2
Rodman & Renshaw p13
Royal Philips Electronics p6
S
Santander Securities Corporation p4
Santaris Pharma p2
Sante Ventures p9
Schering Plough p12
Senior Housing Properties Trust p9
Simplex Diabetic Supply p3
Sirna Therapeutics p2
Skyline Ventures p3
Sofinnova p1
Sudbrook Associates LLP p12
T
Tacere Therapeutics p3
Telegraph Hill Partners p3
Tepha p12
Total Renal Care Holdings p16
Triple-S Management p4
Twickenham p6
U
UBS Investment Bank p4
University of Chicago p9
University of Massachusetts Medical School p3
V
Versant Ventures p3
Vertical Group p12
VISICU p8
W
Wachovia Capital Markets p4
William Blair & Co. p4
Wound Care Advantage p16
Z
Zosano Pharma p3
Zweite TechnoStart Venture Funds p16
|
Annual
Venture Capital Results Shine--
Quarterly Results Slightly Lackluster, But Add To Strong Finish
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Email Editor
This is the fifth year in a
row that venture capital funding has increased for health care companies,
with more total dollars invested and more deals announced than the
previous year. In 2007, health care companies announced 480 deals totaling
$9.7 billion in venture capital. This represents an almost 13% increase in
funding, compared with 2006. The total amount of health care venture
capital raised in 2007 approaches twice the $5.5 billion that was raised
in 2003. The pace is still quick, with an approximately 4% increase in the
number of deals from 2005 to 2006, and from 2006 to 2007. And from what we
hear, venture capital investors anticipate 2008 will be another busy year
for health care.
Many of the most active
venture capital firms made at least a few more deals in 2007 than 2006,
and some made almost twice as many deals. Among these, Alta Partners
is the top firm for the year, with 21 investments in 2007 (in 2006, Alta
made 11 deals). Domain Associates came in second for 2007,
participating in 20 rounds, whereas in the previous year Domain
participated in exactly half that. Other firms that are among the top
health care venture capital investors of 2007 include funds managed by
Sofinnova, with 18 investments, Novartis Ventures funds,
with 17, and Frazier Healthcare Investors and Johnson & Johnson
Development Corporation, each with 16 investments. For 2007, there are
12 top firms that each made 13 or more investments, including Versant
Ventures with 13. By comparison, in 2006, the top investor list
included just 10 firms, which each made between 9 and 12 investments.
The results of the fourth
quarter of 2007 are not quite as impressive as the results for the entire
year. The number of deals and the total dollars invested sank a bit in
Q4:07, compared with both the previous and year-ago quarters. For the
quarter ended December 31, 2007, approximately $2.1 billion of venture
capital financing was provided to health care companies in a total of 109
rounds. This represents a 16% decrease in funding and a nearly 10%
decrease in number of deals, compared with Q3:07. The comparison to the
year-ago quarter is less startling, with Q4:07 exhibiting about a 5%
decrease in funding and 9% decrease in number of deals. On a positive
note, in Q4:07 the median deal size increased to $16 million from $11.5
million in Q4:06.
The largest deal announced
by a health care company during the fourth quarter was the $90 million
round pulled in by Zosano Pharma. Including Zosano’s round, six
rounds of $50 million or more apiece were announced during Q4:07,
accounting for about 18% of all funding for the quarter. The health care
services sector produced two of those deals, even though the sector
accounted for only a small percentage of the number of deals announced in
Q4:07. Reliant Renal Care and Simplex Diabetic Supply each
raised $50 million rounds. As one might expect, the rest of the largest
investments were made in pharmaceutical, medical device and
biopharmaceutical companies.
It would probably take a
combination of answers to fully explain why dealmaking slowed during
fourth quarter 2007. Before making important investment decisions, some
investors may be waiting for the outcome of the presidential election.
Others may be waiting for clarification or solidification of certain
regulatory or reimbursement criteria and requirements. Some venture
capitalists may be looking at foreign opportunities, as globalization
continues to permeate health care and currency exchange rates continue to
fluctuate. Maybe a few VCs have just been resting on their laurels, but
most are probably just enjoying a holiday while they have the chance. This
year is sure to be full of change, but change is always constant, and at
this point, it appears that deal flow is likely be constant in 2008, as
well. |
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