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Private equity, venture investment in biotech surges following two slow months

13 May 2014

biotech_lrgPrivate equity, venture capital and development capital investment activity in biotechnology companies rose sharply in April after two relatively poor months, a new report shows.

From a low base of $188m March, investment value jumped to $1.35bn during the four weeks under review by Zephyr, the second highest result of the past 12 months and of 2014 so far.

Compared to the same time a year ago, value was almost two-thirds higher than the $835m-worth of investment announced in April 2013.

Volume also increased significantly to 28 transactions, the highest recorded of the last 12 months under review and up by a third on the 21 deals announced a year ago.

Two top deals accounted for two-thirds of overall value according to Zephyr, which produces a report on the biotech industry every month.

Private equity buyouts in the sector are relatively few in comparison with funding rounds, so the fact that the number one PE, VC and DC deal by value during April was an acquisition makes it all the more significant, Zephyr said.

Pamplona Capital Management paid around $700m for a majority stake in US-headquartered generic drug maker Alvogen, representing 52 per cent of total PE, VC and DC investment for the month.

At number two in the rankings by value was a $200m round of funding for Intarcia Therapeutics, a Californian biopharmaceuticals company, from investors including New Leaf Venture Partners, Quilvest, Templeton Asset Management and Foresight Capital Management.

A combined $1.18bn was invested in US-based biotech companies during April, representing 88 per cent of the month’s total global PE, VC and DC investment, and placing the country top in the rankings.

The US also took number one spot by volume with 18 transactions, accounting for 64 per cent of the 28 deals recorded for the month.

At number two in the rankings by value was the UK, with companies based in the country targeted in deals worth a collective $84m, its best result of the last 12 months under review.

Australia and Ireland followed in third and fourth place with $45m and $20m, respectively, again their highest results of the last year.

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