VC dips in Q1, but biotech still leads the pack

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The biotech industry raised almost $825 million in 99 venture capital deals in the first quarter of 2010, according to data released by PriceWaterhouseCoopers and the National Venture Capital Association. Biotech boasted the highest level of funding for all industries in the quarter, but it's a sharp drop-off from 2009 levels (chart). 2010 investing dropping 26 percent in dollars and 21 percent in deals from the prior quarter to $1.3 billion going into 160 deals, when $1.1 billion went into 115 deals.

"Life Sciences continues to be the number one sector for VC investing, with biotechnology being the absolute single-industry leader in dollars invested over the past four quarters," notes Tracy Lefteroff, global managing partner of the venture capital practice at PricewaterhouseCoopers. "Venture capitalists continue to exhibit great confidence in the Life Sciences sector, as well as Clean Technology, as they outperformed all others in venture capital investing in the first quarter. VCs are upholding the belief that the prospects for liquidity are good in these areas, and we continue to see IPO filings for VC-backed companies in each of these sectors."

Bill Wiberg, a general partner at Advanced Technology Ventures, tells the Associated Press that the industry's numbers will likely improve as the year goes on. And biotech investment will remain strong since Big Pharma is continually on the prowl for therapies developed at small biotechs. The possibility of a deal or an acquisition keeps VCs interested, even though the biotech IPO market hasn't quite recovered.

Overall, VC investment was down 10 percent from Q4, but up 38 percent from the same time last year, when the economy as a whole hit a particularly rough patch.

- read the NVCA release for more details
- view this chart to see how 2010 VC compares to other other quarters
- here's more from the AP

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