Venture Capital funding

Venture Capital funding

The Purse strings for VC capital have loosened significantly for Biotech across the US and in Colorado. 

Venture Capital funding hit record numbers in 2014 after years of quietly sitting in the shadows.  Investor confidence in 2014 rose to a staggering level, reminiscent of the boom year of 1995.  As baby boomers age, the need for medical care and their medical costs have skyrocketed.  Leading the charge are new drugs for Alzheimer’s, cancer, and obesity, which are todays gold mine for savvy investors.  New drugs for these three aliments is expected to be worth 1.2 trillion over the next three years.

Venture capitalists (VCs) invested $2.5 billion in 195 life sciences deals during the second quarter of 2014, compared with $2.0 billion in 197 deals during the same period in 2013. Life sciences investment during the quarter was the highest since the second quarter of 2007, and also the strongest second quarter for life sciences since 1995, when the data series started. (per 3/12/14 blog) 

However, life sciences’ share of total venture funding was 19% during the second quarter of 2014, compared with 28% in the second quarter of 2013.

The biotechnology industry raised $1.84 billion in 122 deals during the second quarter, which was second (behind software) in terms of dollars raised, which drove $6 billion in 454 deals.

VC investments in biotechnology benefited from a couple of large biotechnology deals—Intarcia Therapeutics’ $200 million and Proteus Digital Health’s $119.5 million. However, even after excluding those large deals, biotechnology still took a nearly 40% jump in investment dollars over the prior quarter.

“The industry’s stellar fundraising quarter is due to a virtuous cycle for biotechs,” said Greg Vlahos, life sciences partner at PwC. “The IPO boom has provided VCs with some very real exit opportunities, and the public markets’ warm reception to drug developers has pushed M&A valuations skyward. Combined, those factors have created significant liquidity for investors, allowing VCs to quickly gather new funds and back more companies.”

The medical device industry received $649 million in 73 deals in the second quarter of 2014. This was an increase of 23% in dollars, but a decrease of 5% in deal volume, compared with the same quarter last year., report from PricewaterhouseCoopers, August 2014.

Colorado has also seen its share of biotech investing in 2014 and into 2015. Below is a glance at some of the investing.