• SKIP TO CONTENT
  • SKIP NAVIGATION
  • Patient Resources
    • COVID-19 Patient Resource Center
    • Clinical Trial Listings
    • What is Clinical Research?
    • Volunteering for a Clinical Trial
    • Understanding Informed Consent
    • Useful Resources
    • FDA Approved Drugs
  • Professional Resources
    • Research Center Profiles
    • Market Research
    • FDA Approved Drugs
    • Training Guides
    • Books
    • eLearning
    • Events
    • Newsletters
    • White Papers
    • SOPs
    • eCFR and Guidances
  • White Papers
  • Clinical Trial Listings
  • Advertise
  • COVID-19
  • Sign In
  • Create Account
  • Sign Out
  • My Account
Home » Venture capital investment in life sciences down 9%

Venture capital investment in life sciences down 9%

July 20, 2012
CenterWatch Staff

Despite venture capitalists investing $7 billion in 898 deals in the second quarter of 2012—a 17% climb in terms of dollars and an 11% rise in the number of deals compared to the first quarter of 2012, when $6 billion was invested in 809 deals—the life sciences sector (biotechnology and medical devices) saw a 9% drop in funding dollars and a 6% drop in deals from the prior quarter, to $1.4 billion going into 174 deals in Q2.

According to the MoneyTree Report from PricewaterhouseCoopers (PwC) and the National Venture Capital Association (NVCA), based on data provided by Thomson Reuters, the total number of early stage deals reached the highest quarterly total since Q1 2001, with $2.1 billion going into 410 deals. That’s an 18% increase in dollars and a 28% increase in deals from the prior quarter. Overall, the software industry took in the highest level of funding of all industries with $2.3 billion invested in Q2, the highest investment total for the sector since the Q2 2001.

"The concentration of venture capital dollars in the hands of fewer firms will increasingly dictate the flow of investment," said Mark Heesen, president of the NVCA. "Currently, this translates into more funding for IT startups and less capital available for life sciences and clean technology. We hope to see this investment mix rebalance over time as the startup ecosystem is better served with more diversity, not less. Additionally, we continue to watch the early stage and first-time financing numbers as they are critical to the U.S. innovation pipeline. We are encouraged that these numbers were stronger this quarter and hope that this signals an ongoing commitment on behalf of venture firms to make these longer term, breakthrough investments."

Tracy T. Lefteroff, global managing partner of the venture capital practice at PwC U.S., said, "Given the regulatory challenges currently impacting the life sciences industry and the amount of capital required to fund these companies, it's no surprise that investments in this industry have declined for the fourth consecutive quarter."

Life Sciences investing fell, most notably in the biotechnology sector where $697 million went into 90 deals, the lowest quarterly total for the industry since the Q1 2003. The medical devices and equipment industry garnered the third highest investment amount in Q2 with $700 million going into 84 deals, an 11% increase in deals while dollars remained relatively flat compared to the prior quarter. Investments in life sciences accounted for 20% of all venture capital dollars invested for the quarter, down from 29% in 2011.

Seed stage investments rose 33% in dollars and 15% in deals, with $199 million invested into 63 deals in the second quarter. Early stage investments also rose, climbing 18% in dollars and 28% in deals, with $2.1 billion going into 410 deals, the largest quarterly deal total since the Q1 2001. Seed/early stage deals accounted for 53% of total deal volume in Q2. Expansion stage dollars increased 49% in the second quarter, with $2.6 billion going into 232 deals. Overall, expansion stage deals accounted for 26% of venture deals in the second quarter. Later stage deals decreased 10% in dollars and 11% in deals, with $2.1 billion going into 193 rounds in the second quarter.

First-time financing (companies receiving venture capital for the first time) dollars increased 24% to $1.1 billion for the quarter, the number of deals rising 27% to 282 deals. Life sciences saw a slight drop in first-time financings, falling 3% in dollars and 4% in deals during the second quarter to $130 million going into 27 companies. 

Upcoming Events

  • 12Apr

    The Participant Playbook Webinar Series, Part 3 — Rethinking the Development of Participant-Centric Clinical Trial Technology

  • 25Apr

    Effective Root Cause Analysis and CAPA Investigations for Drugs, Devices and Clinical Trials

  • 26Apr

    FDA’s New Laws and Regulations: What Drug and Biologics Manufacturers Need to Know

  • 27Apr

    Califf’s FDA, 2023 and Beyond: Key Developments, Insights and Analysis

  • 17May

    2023 WCG Avoca Quality Consortium Summit

  • 21May

    WCG MAGI Clinical Research Conference – 2023 East

Featured Products

  • Spreadsheet Validation: Tools and Techniques to Make Data in Excel Compliant

    Spreadsheet Validation: Tools and Techniques to Make Data in Excel Compliant

  • Surviving an FDA GCP Inspection

    Surviving an FDA GCP Inspection: Resources for Investigators, Sponsors, CROs and IRBs

Featured Stories

  • Five Ws

    Consider the Five ‘W’s to Understand Potential Participants

  • QandA-360x240.png

    Perspectives from Smaller-Sized CROs: Q&A with Cheryle Evans

  • White House

    Trial Stakeholders Advise White House on Emergency Research Infrastructure

  • SurveywBlueBackground-360x240.png

    Stress Levels Continue to Climb in Healthcare Workforce, Survey Finds

Standard Operating Procedures for Risk-Based Monitoring of Clinical Trials

The information you need to adapt your monitoring plan to changing times.

Learn More Here
  • About Us
  • Contact Us
  • Privacy Policy
  • Do Not Sell or Share My Data

Footer Logo

300 N. Washington St., Suite 200, Falls Church, VA 22046, USA

Phone 617.948.5100 – Toll free 866.219.3440

Copyright © 2023. All Rights Reserved. Design, CMS, Hosting & Web Development :: ePublishing