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Venture investment in US biotechnology companies continues to swell, data says

Venture capital investment in US biotechnology firms continued to grow robustly in the third quarter of 2003. Biotechnology companies received more investment than any other industry sector for the first time in seven years, according to the PricewaterhouseCoopers/Venture Economics, NVCA MoneyTree Survey.

Biotechnology companies raised $873m, displacing software as the leading category. The broader life sciences sector totalled $1.24bn, or 30 per cent of total venture investment.

Total venture capital investment amounted to $4.2bn in 667 entrepreneurial companies in the third quarter of the year. This represents a decline of eight per cent in terms of value and a decline of five per cent in the number of deals taking place. But investment levels remained above those seen in the first quarter of the year.

‘We are settling back into a realistic balance between entrepreneurial enthusiasm and venture capital risk,' said Tracy Lefteroff, global managing partner of the venture capital practice at PricewaterhouseCoopers. ‘Within this more stable framework, genuine innovation is nurtured to fruition over time, with appropriate levels of investment along the way.'

‘This ongoing, sustainable investment level continues to support the fact that venture capitalists are back to investing or the long-term at a consistent pace,' added Mark Heesen, president of the National Venture Capital Association.

‘Confidence in our market is increasing, but we are pleased that venture capitalists are showing prudence and patience in light of some positive economic signs. We are not looking for major swings in activity at this point,' he said.

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