PWC Report Shows Decrease in Life Sciences Venture Capital Funding; Still Cause for Hope

A recent report released by PwC’s Pharmaceuticals and Life Sciences Industry Group indicates that life sciences venture capital funding has shrunk for the fourth straight quarter.

On medcitynews.com, contributor Arundhati Parmar writes that “the decline was 39 percent in amount invested and 22 percent in number of deals in the second quarter from the same quarter in 2011. Total money invested in the sector that includes biotechnology and medical devices was $1.4 billion in the second quarter and the number of deals fell to 174. What’s more, the results show a four quarter slide.”

He continues,

“Both biotech and medical device venture funding took a hit. A total of 84 deals brought in $800 million for the medical device industry, but the numbers represent drops of 11 percent in deal volume and 17 percent in amount invested year over year. Biotech took a much bigger hit with a 52 percent decline in funding to $697 million and a 30 percent drop in number of deals to 90 deals in the second quarter.” Read more at medcitynews.com.

However, there is still cause for hope. As global managing partner of the venture capital practice at PwC US Tracy T. Lefteroff explained,

“The pace of venture-backed exits we saw for life sciences companies during 2011 should encourage investors. If M&A activity picks up during the second half of this year, investors should continue to see a clearer path to returns, which potentially could attract more money to be invested in this sector.

“Additionally, the new Jobs Act could spur more confidential IPO filings, creating the opportunity for more exits. This act makes it easier for start-ups with under $1 billion in annual revenue to go public by relaxing Sarbanes-Oxley requirements for five years.”

He continued,

“Finally, the recently passed user fee legislation contains some incentives for companies to develop breakthrough therapies for infectious and rare diseases. These include extended market exclusivity for qualified infectious disease products and expedited FDA review for therapies that address unmet medical needs to treat rare and life-threatening diseases and conditions. Such incentives could pique the interest of investors in companies developing innovative products that might have a shorter path to market.”

Read the full report here. 

Biotech and related conferences in June 2012

June 2012 is a busy month for biotech and related conferences. Below are a few of the conferences taking place:

International Society for Cellular Therapy Annual Meeting 

Date: June 5-8, 2012

Venue: Sheraton Seattle, Seattle, WA

http://www.celltherapysociety.org/index.php/meetings-events/isct-2012-annual-meeting

SeeThruEquity.com SmailCap Equity Conference - sponsored by ProActive Capital

Date: June 5, 2012

Venue: The Cornell Club

http://www.seethruequity.com/content/2012-06-05-conference.aspx

 

National Investment Banking Association Conference

 

Date: June 7-8, 2012

Venue: Le Parker Meridien Hotel, New York, NY

http://nibanet.org/conferences/niba-june-7-8-2012-new-york-ny-conference

International Society for Stem Cell Research 10th Annual Meeting

 

Date: June 13-16, 2012

Venue: Pacifico Yokohama, Yokohama, Japan

http://www.isscr.org/Annual_Meeting_Home.htm

 

The Biotechnology Industry Organization (BIO) International Conference

 

Date: June 18-21, 2012,

Venue: Boston Convention & Exhibition Center, Boston, MA

http://convention.bio.org/

 

Alliance for Regenerative Medicine - Clinical Outlooks for Regenerative Medicine 2012

 

Date: June 19, 2012

Venue: The Starr Center, Schepens Eye Research Institute, Boston, MA

http://www.hsci.harvard.edu/node/4162

Marcum's Inaugural MicroCap Conference

Date: June 20, 2012

Venue: The Roosevelt Hotel, New York, NY

http://www.marcumllp.com/events/microcap-conference

The Biotech Bull Market Is Just Getting Started @ Growth Stock Wire

According to an article on GrowthStockWire.com by Larsen Kusick, the  lead analyst for the exclusive Phase 1 Investor advisory, the biotech sector is on its way up. He cited Roche's $5.8 billion bid to buy Illumina, Bristol-Myers' $2.5 billion offer for Inhibitex, and Amgen's $1.2 billion bid for Micromet as "part of a larger trend that's propelling the whole biotech sector to new highs. And it's just getting started."  

Kusick pointed out that while "Big Pharma companies have tons of cash...these companies aren't growing." The average sales growth this year for companies like Johnson & Johnson, Pfizer, Amgen, Merck, Roche and others is negative 0.6%. These companies are "losing billions of dollars in revenue as blockbuster drugs, like Lipitor, go off patent and have to compete with cheaper generic versions. Big Pharma executives realize the only way to boost revenue growth, while earning a reasonable return on their investment, is to buy biotech assets at distressed prices."

He predicted that "a growing buyout bonanza would put a solid bid beneath biotech stock prices. The sector is already rocketing off its 2011 lows." The chart below illustrates his point:

He concluded, "if Big Pharma puts more of its cash to work this year, the uptrends here are just the beginning."

Read the full article at GrowthStockWire.com.