As the technology slump lurches forward, and the federal brain stem cell research debate continues unabated, health and life science investing continues to receive relatively rapt attention.
To date, VCs have poured approximately $1.06 billion into 67 companies involved in human therapeutic biotechnology products and related services, according to our VentureXpert database. While not all of these companies rely on brain stem cell research, companies conducting brain stem cell research and similar trials do fall within this category.
Over the past five years, about two-thirds of biotech disbursements would typically be directed to these companies, but in 2001 VCs have funneled 79% of their biotech investments into companies involved in human therapeutic products.
In this category, VCs have invested $411.9 million in 32 expansion-stage companies and $336.2 million in 18 later-stage companies. Early-stage companies have only attracted $225.3 million.
Human therapeutic biotech companies located in Northern California attracted the most VC activity with 13 such outfits attracting $240.3 million. Companies located in the New York Tri-state area and Southern California also received considerable attention from VCs.
Warburg Pincus and MPM Capital have been among the most active venture firms in the sector this year, investing $98.1 million and $43.1 million respectively. Affymetrix Inc., Alta Partners and JPMorgan Partners have also been making some significant sector noise.
According to Deloitte & Touche?s most recent Silicon Valley and East Coast Venture Capital Confidence Survey, VCs generally view investments in the biotechnology sector more favorably than other sectors.
Fully 71% of the roughly 350 VCs polled expected transactions in the biotech sector to increase over the next six months, and 24% of the remaining VCs expected the levels to stay the same.
Conversely, less than a quarter of the VCs expected increased investments in wireless and telecommunications, network hardware/software or semiconductors, and only a third of the VCs expected an increase in transactions involving enterprise software companies.
Charles Fellers can be contacted at: