A couple good posts on the state of venture investing in the Life Sciences sector are here. The first from Pharmalot summarizes a recent PricewaterhouseCoopers and National Venture Capital Association report that shows that life science VC investing fell 9% in dollars and 6% in numbers of deals in Q2 2012 with $1.4 B invested. This is the fourth consecutive quarter of decline. The biotech portion of life sciences received only $697 M across 90 deals which represents the lowest quarterly output since 2003. Yikes!
The second post comes to us from the Life Sci VC blog. It tells a tale of woe with regard to the number of firms actively participating in life science VC investing. From the blog's data, it appears that about half the venture firms investing in VC in 2007 have gone by the boards in that sector in 2012. See data plotting number of firms participating in all biotech financings and in first financings in particular. Both have fallen by about 50% in the past 5 years.
Conclusion is times are tough in Life Science VC which should come as no surprise to those following the area. Hopefully, the result of this will be that natural selection will favor the best projects receiving the future funding more preferentially -- which in turn could increase the returns for investors and spur more investment.
Posted by Bruce Lehr Jul 24th 2012.