Biotech VC investing grows 3% in 2010

In 2010, biotech venture capital investing recovered from its 2009 low, growing three percent in dollars and eight percent in deals. That represents a significant bounce-back from 2009, which saw biotech investing plummet 19 percent during the worst of the economic crisis. That's according to a MoneyTree Report by PricewaterhouseCoopers and the National Venture Capital Association, based on data from Thomson Reuters. 

The industry dropped to second place overall behind software, with $3.7 billion going into 460 deals. The fourth quarter was not a strong one for biotech; investing declined 24 percent in dollars and fell 15 percent in the number of deals from the third quarter with $685 million going into 94 rounds. And that's a huge drop from Q4 2009, when investing grew 10 percent over the previous quarter. Life Sciences and Networking and Equipment industries were the only two industries not to post double-digit growth number in 2010.

Though biotech grew less than other sectors in 2010, it's not necessarily a bad sign for the industry. "Unlike other industry sectors that tend to ebb and flow with greater swings, the life sciences sector continues to show a steady, committed level of investment," said NVCA spokesperson Emily Mendell in an email to FierceBiotech. "This steadiness has served the sector well over the years giving VCs no reason to change their strategy. While there continue to be concerns about the impact on VC investment in innovation by uncertain FDA approval processes, that has been somewhat counter balanced by an improved exit market for venture backed companies. VC investors know that they are in for the long haul--they always have--but now there is a brighter light at the end of the tunnel where there wasn't in 2008 and 2009."

Overall, venture capitalists invested $21.8 billion in 3,277 deals in 2010, an increase of 19 percent in dollars and a 12 percent rise in deals over the prior year.

- here's the release