An analysis of venture capital funding for biotechs in Qtr 1 showed it dropped by 43%. PricewaterhouseCoopers did further work to show that companies who received their first round of funding dropped by 53% and dollars invested in deals dropped 38%.
This has been taken by some as an indication that the biotech arena is starving for cash to support the growth of new companies. Of course, the movement of VCs out of this area has also been a hot topic the past few years.
However, Bruce Booth of Atlas Venture is less worried. And......he actually makes his living in VC. Booth says that one shouldn't get too upset over quarter to quarter variations in investments. He notes that Qtr 1 2012 is still within 10% of Qtr 1 2011 -- which turned out to be a good VC year in life sciences. Finally, he says that VC investing in biotech as a percentage of total VC capital has remained pretty stable over the last decade at approximately 25%. See Fierce Biotech. Not to worry.
Posted by Bruce Lehr May 10th 2012