The activity of early stage healthcare companies is on the rise, though seed stage is tapering off – or so said Bobby Franklin, President and CEO of the Washington, D.C. trade group National Venture Capital Association, in a talk today at Chicago’s MedCity News INVEST Conference.
However, medical devices haven’t fared nearly as well. While biotech investment hit a 21-year high in 2015, medical device funding has dropped to just a quarter of healthcare dollars. Here’s an overview of his talk, illustrated with slides:
Source: NVCA
San Francisco has taken the top slot of healthcare funding, beating out Cambridge in both biotech and medical devices between 2011 and 2015:
Source: NVCA
Corporate venture capital is playing an important role in life sciences investment, he said – particularly in biotechnology.
A Deep-dive Into Specialty Pharma
A specialty drug is a class of prescription medications used to treat complex, chronic or rare medical conditions. Although this classification was originally intended to define the treatment of rare, also termed “orphan” diseases, affecting fewer than 200,000 people in the US, more recently, specialty drugs have emerged as the cornerstone of treatment for chronic and complex diseases such as cancer, autoimmune conditions, diabetes, hepatitis C, and HIV/AIDS.
Source: NVCA
As seen in his slide below, the number of healthcare-centric funds dropped from 18 in 2014 to 9 in 2015, and the number of investments in individual companies has remained steady since about 2009. The number of exits remains strong, however – buoyed by the recent bumper crop of IPOs in 2014 and 2015 that has certainly leveled off this year.
Source: NVCA
M&A has remained steady over the years, Franklin said. And though we saw that leveling off of IPO activity in the life sciences this year, it’s still worthy of note that the time it takes to go public has decreased substantially:
Source: NVCA
