VC life science investment wanes in Q3 (MassDevice)
Venture capitalists’ investments in life science companies waned during the third quarter to its lowest point since the first quarter of 2009.
Venture capitalists invested $1.8 billion in 170 life sciences deals during the third quarter, down 18 percent compared with Q2, and marking the lowest number of deals since the first quarter of 2009.
Still, VC life science investment is still on track to top last year’s numbers, according to theMoneyTree Report from PricewaterhouseCoopers and the National Venture Capital Assn. Compared with Q3 2010, investment rose 22 percent during the three months ended Sept. 30, according to the report.
“VCs are saying that challenges in the regulatory environment for life sciences companies are prompting them to look to other industries to put their money to work for a faster return on their investment,” Tracy Lefteroff, global managing partner of the venture capital practice at PwC US, said in prepared remarks. “When investors see a lack of exits for their companies, it depresses their appetite for funding on the front end. The nearly shut IPO window and volatility in the equity market during the third quarter contributed to the slowdown in life sciences venture funding.”
Compiled using data from Thompson Reuters, the MoneyTreereport also details VC investment in medical device companies. Med-tech’s share of the pie in Q3 slipped 2 percent year-on-year, to $728 million or 40 percent of total VC backing during the quarter. That’s a 17 percent increase compared with Q3 2010, despite deal volume declining 20 percent to 74 transactions.
Early-stage investment in the med-tech space rose 12 percent compared with last year, as backers put $163 million into nascent operations during the quarter. Late-stage funding rose even more, to $565 million, up 18 percent compared with Q3 2010.