Biotech investment slumps as VC deals overtake buyouts

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The value of private equity and venture investment in the biotech sector during February slumped after hitting a 12-month high in January, according to data compiled by Zephyr and Bureau van Dijk. 

A total of $162m was ploughed into global biotech companies during the four weeks under review, dropping sharply from a high base of $4.221bn the previous month. However, in a year-over-year comparison, the result was 82 per cent higher (February 2013: $89m).

Volume also weakened over the four weeks to ten transactions, marking the second consecutive monthly decline (December 2013: 17; January 2014: 15), but was slightly higher than the nine transactions signed off at the same time a year ago.

All but one of the top deals targeting biotech companies in February were minority stake transactions. The only buyout to feature involved Kainos Capital acquiring InterHealth Nutraceuticals, a California-based speciality nutritional ingredients manufacturer, for which the price tag was not disclosed.

No single transaction topped the $100m-mark, and the highest value deal was a $55m funding round for Versatis, a Californian firm engaged in research and development of therapies for endocrine disorders.

While most of the recipients of investment were US companies, targets based in the UK, France and Switzerland also featured. However, the $153m-worth of transactions recorded was a steep drop from $4.17bn in January. Volume held month-on-month at seven deals.

In monetary terms, the UK ranked second with $7m, the country’s best result since November 2013, and France third with $3m, its highest since October.

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