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Venture capital deals drop for life sciences sector in second quarter

Arundhati Parmar

Venture capital deals and the total number of venture dollars invested in the life sciences sector were both down in the second quarter of the year compared to a year before.

The PricewaterhouseCoopers MoneyTree report found that the decline was 39 percent in amount invested and 22 percent in number of deals in the second quarter from the same quarter in 2011. Total money invested in the sector that includes biotechnology and medical devices was $1.4 billion in the second quarter and the number of deals fell to 174. What’s more, the results show a four quarter slide.

Both biotech and medical device venture funding took a hit. A total of 84 deals brought in $800 million for the medical device industry, but the numbers represent drops of 11 percent in deal volume and 17 percent in amount invested year over year. Biotech took a much bigger hit with a 52 percent decline in funding to $697 million and a 30 percent drop in number of deals to 90 deals in the second quarter.

Taken together, the life sciences share of venture dollars fell to just 20 percent of the overall venture money invested across all sectors. That is the lowest level since the third quarter of 2002.

The medical device industry has typically trailed biotech in the amount of money received, but quarter-over-quarter, that chasm has virtually disappeared. The medical device industry’s share of venture dollars increased to slightly more than 50 percent in the second quarter, up from 45 percent in the first quarter. Meanwhile, biotech’s share dwindled to just under 50 percent, compared with 55 percent during the first quarter.

Read the full report titled “Dollar Drought”.

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