Venture capital investments in the US life sciences sector fell 1% in terms of value last year compared to 2012, while the number of deals was down 3%, according to new data from PricewaterhouseCoopers (PwC) US.
Venture capitalists (VCs) invested $6.6 billion in 778 US life sciences deals in 2013, compared to $6.7 billion in 800 such deals in 2012, it says.
However, while life science firms’ share of total US VC funding declined from 25% in 2012 to 23% in 2013, investment in the sector during fourth-quarter 2013 rose 19% to $1.8 billion from $1.5 billion in the third quarter, and the number of deals rose to 228, from 188 in the third quarter.
These figures “show there is continued interest in biotechnology,” says Greg Vlahos, life sciences partner at PwC. “With the strong exit markets for biotechnology in 2013, 2014 is set up for renewed interest in life sciences.”
“In fact, first-time funding witnessed a strong finish to the year, increasing 48% in 2013. The enduring interest in early-stage opportunities will continue to drive investments in the sector,” he forecasts.
Biotech companies raised $4.5 billion in 470 US deals during 2013, making it the second-largest investment sector behind software. Investments in biotech increased 8% by value during the year but fell 2%, while in the final quarter investments rose 43% by value and 10% by deal numbers, with $1.3 billion flowing into 134 deals, compared with $928 million in 122 deals during third-quarter 2013.
First-time funding for life sciences companies rose 48% by value last year, at $1 billion going into 154 companies compared to $664 million into 148 companies in 2012. And funding for biopharmaceutical firms rose 8% to $70 million in fourth-quarter 2013 compared with the same period of 2013.
Also in fourth-quarter 2013, $409 million went into 48 life science companies receiving VC investment for the first time, up 161% by value on the third quarter and up 7% in terms of deals.
The five US metropolitan regions receiving the great levels of life sciences venture capital funding during fourth-quarter 2013 were San Francisco Bay ($550 million), Boston ($382 million), Seattle ($186 million), San Diego Metro ($95 million) and New York Metro ($83 million).
These five regions accounted for 73% of VC investments in life sciences companies during fourth-quarter 2013, according to PwC.