PwC: Life Sciences Venture Capital investing posts gains

By Rob Starr, Content Manager, Big4.com

Venture capital (VC) funding in the Life Sciences sector, which includes the Biotechnology and Medical Device industries, gained in Q3 in terms of dollars compared to the second quarter of 2012, but the sector still trended downward for the year, according to a new PwC US report, “Biotech bounce,” that includes data from the PricewaterhouseCoopers LLP/National Venture Capital Association MoneyTree™ Report, based on data from Thomson Reuters.

For all sectors, venture capitalists invested $6.5 billion in 890 deals in Q3 2012, a decrease of 10 percent in dollars invested and a 12 percent decline in deals, compared to $7.3 billion going into 992 deals in the third quarter of 2011. The Life Sciences share of total venture capital dollars invested rebounded to 26 percent in Q3, a six percent increase from Q2 2012, which was the lowest level since the third quarter of 2002.

In Q3, Medical Device investments dropped to the lowest dollar level since 2004 and fell to sixth place among all industries for the quarter, a big drop from being the second largest industry category in the prior quarter.  With $434 million going into 65 deals in Q3, investments into the Medical Device industry dropped 37 percent in dollars and 27 percent in deals from Q2 2012.  On a year-over-year basis, dollars invested fell 42 percent in dollars and 27 percent in deals..

Within the Medical Device industry, only the Medical/health Products subsegment saw an increase in Q3 2012 from Q3 2011, increasing only 4 percent in dollars to $78 million. The Medical Diagnostics and Medical Therapeutics subsegments both experienced declines during the same time period, however, the Medical Therapeutics category still accounted for 72 percent of the dollars and 50 percent of deals in the third quarter with $311 million going into 33 deals.