While the global biotech industry is showing positive signs of recovery, venture capital commitments to the sector have yet to follow suit, according to Ernst & Young’s mid-year biotech update.
Venture capital investment into the sector remained strong on the whole over 2002 with around $1.1bn raised by European biotech companies, but fund raising in 2003 is down by around 50%. This is contrary to the US where fund raising has held up.
William Powlett Smith, partner and UK health sciences leader at Ernst & Young says: “We are seeing realism enter the sector, following the exuberance of the past. However, there are successes to talk of with UK companies attracting the largest sums. These include Arrow (£21m), Ardana (£20m) and Biovex (£17m). While early stage funding has been particularly hit, there is some evidence that investors are looking at seed funding again.”