Article preview from Start-Up - October 1, 2011
The state of venture capital investing in medical devices and biopharmaceuticals can be examined from different angles and perspectives, but each presents the same troubling image: the two sectors are commanding less and less interest from VCs, according to surveys conducted by Start-Up magazine and the National Venture Capital Association.
Article preview from Start-Up - October 1, 2011
The state of venture capital investing in medical devices and biopharmaceuticals can be examined from different angles and perspectives, but each presents the same troubling image: the two sectors are commanding less and less interest from VCs. The most recent perspective comes from a survey conducted by the National Venture Capital Association's MedIC Coalition, which determined that venture capitalists are steering away from medical device and biotechnology companies largely because of the regulatory hurdles that make investments in those sectors more difficult to manage. The survey results echo the findings of START-UP's own survey published last month.
Taken together, the two surveys present strong evidence that VCs are increasingly intimidated by the regulatory process. The NVCA's MedIC group was founded last year to amplify the voice of VCs and life sciences start-ups in Washington. The group conducted the survey with an eye toward using it as a tool to lobby for changes at the FDA, and the results will help them make that case. This potential bias may cause some to dismiss the findings, but they are backed up by the results of our survey which was drawn up by our editors with no agenda in mind other than taking a measure of the life sciences venture capital industry.
The parallels between the two surveys are evident, particularly on the question of how investors intend to invest their current and future funds. In our START-UP survey, nearly one-quarter of the more than 70 respondents indicated they were steering resources away from life sciences altogether. Nearly one-third (32%) said they'd steer capital away from biopharmaceutical investing while 22% reported similar plans to move away from devices.
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About Start-Up
No publication reviews leading edge companies and technology better than START-UP. Each issue of START-UP profiles the most important new product companies, identifies the hottest technology areas, reviews funds flowing into private companies and investment trends, and reports on university tech transfer licensing. Industries covered: pharmaceuticals, biotechnology, medical equipment & devices, and in vitro diagnostics.
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