Venture funds hit the brakes on biotech investing

There are troubling signs of a major downturn in biotech investing in the U.S. Genetic Engineering News outlines the sudden drop in the number of financings involving venture firms. And they're funneling far less money into the industry. In the first quarter venture firms made 315 investments in the life sciences field worth $3 billion. That dropped to 215 investments totaling $1.9 billion in the second quarter. Narrow the field to just biotechnology and there was a 40 percent plunge in the amount of venture cash being injected into development companies.

Why the sudden drop? GEN points to investor reluctance to back a risky biotech play at an uncertain time for the markets, a long wait for any returns and a preference to dabble in the clean energy industry instead of drug development.

It also doesn't help that there were no public offerings of biotech companies in the second quarter--narrowing if not closing a primary exit path for VC firms.

- check out the report [1] from Genetic Engineering News

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