Stephen M. Monroe, Partner
Gretchen S. Swanson, Associate Editor
Fax: 203-846-8300
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.
Health Care Venture Capital Investment Activity, Q3:03 to Q3:05
Number of Deals
Total Invested
$1.4 billion
$1.8 billion
$2.0 billion
$2.0 billion
$1.3 billion
$1.6 billion
$2.0 billion
$1.9 billion
$1.7 billion
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 ( 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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