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Aug 16, 2012

It’s Tool Time for VCs

  • Venture capital investment in biotech and pharmaceutical equipment—and especially biosensors—rose during the second quarter, even as overall biotech investment fell by double digits in terms of both dollars and deals, according to a just-released report.

    Dollar Drought, released by PwC US, the American unit of PricewaterhouseCoopers, found that VCs invested $53 million in biotech equipment, up 5% from a year earlier, while financing for biosensor startups ballooned 7.280% to $6 million.

    “The sizable increase for biosensors was due primarily to negligible funding activity during the same quarter last year,” Tracy T. Lefteroff, global managing partner of the venture capital practice at PwC US, said in the report.

    The report didn’t explain the increase in financing of bioequipment companies. Speaking with GEN last month, Jonathan Witonsky, industry manager, life science research tools & in vitro diagnostics with Frost & Sullivan, said established research tools companies had benefited during Q2 from increased demand by Tier II biotech companies. That demand, he said, helps tool companies by making up for a flat-to-shrinking academic customer base, though universities could be expected to step up purchases this year because of possible across-the-board federal budget cuts in 2013 [ GEN News Highlights, July 26 ].

    PwC joins with the National Venture Capital Association every quarter to release the MoneyTree Report on VC trends, based on Thomson Reuters data. Dollar Drought restates findings from the most recent MoneyTree Report—notably the continuing migration of VC investors from biopharma startups.

    The dollar value of VC deals fell by more than half (almost 52%) during the second quarter from year-ago numbers, with about $696.8 invested in a total 90 biopharma companies during Q2 ’12, compared with $1.4 billion in 129 deals during the second quarter of 2011.

    Read Dollar Drought here: www.pwc.com/us/lifesciencesmoneytree 


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