NEW YORK, May 8, 2012 /PRNewswire/ -- Venture capital (VC) funding in the Life Sciences sector, which includes the Biotechnology and Medical Device industries, decreased 22% during the first quarter of 2012 from the prior quarter, according to a new PwC US report, "Mixed Momentum," that includes data from the PricewaterhouseCoopers LLP/National Venture Capital Association MoneyTree Report, based on data from Thomson Reuters.

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Venture capitalists invested a total of $1.5 billion during the first quarter, the lowest level since the fourth quarter of 2010. Deal volume was also down, dropping 11 percent from Q4 to 171 deals. When compared to a year ago, dollars invested into Life Sciences companies during Q1 of 2012 decreased 8 percent while the number of deals declined 12 percent from the $1.6 billion invested in 195 deals during the first quarter of 2011.

For all sectors, venture capitalists invested $5.8 billion in 758 deals in Q1 2012, a decrease of 19 percent in dollars invested and a 15 percent decline in deals, compared to $6.7 billion going into 861 deals in the first quarter of 2011. The Life Sciences share of total venture capital dollars invested stood flat at 26 percent in Q1, a one percent decrease from Q4 2011.

"Venture capitalists remained cautious during the first quarter after a lackluster fourth quarter in the public markets, as evidenced by the shift from investing in earlier stage companies to a focus on later stage companies in Q1," remarked Tracy T. Lefteroff, global managing partner of the venture capital practice at PwC.

During the first quarter, Biotechnology accounted for 53percent of funding, while medical devices claimed 47percent of dollars invested. In comparison, during the fourth quarter of 2011, Biotechnology captured 73 percent of investment in the sector and Medical Devices accounted for 27 percent of the total.

Biotechnology investing decreased by 43percent in dollars and 14 percent in deals, with $780 million going into 99 deals. Despite the drop, Biotechnology ranked second in terms of overall dollars invested, second only to the Software industry. On a year-over-year basis, biotechnology investments decreased 18 percent with deals down 9 percent, with $949million going into 109 deals during the first quarter of 2011.

Medical device investments rose 33 percent in dollars quarter-over-quarter while the number of deals dropped 6 percent during the same time period. With $687 million going into 72 deals in Q1, the Medical Device industry ranked behind Software, Biotechnology, and Industrial/Energy in dollars invested.

"A more active M&A market may be the reason that the Biotech industry experienced a decline in investing in Q1, as VCs saw more of their portfolio companies experience exits during the first quarter," remarked Lefteroff. "While on the surface, the jump in dollars invested in the Medical Device industry during Q1 may seem surprising given the 22% drop in Life Sciences funding overall, a deeper dive shows that companies in the Later stage of development accounted for more than half of the investments in this industry."

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Link:
Life Sciences Venture Capital Funding Falls 22% in Q1 2012, According to the MoneyTree Report