Biotech venture rounds dwindle in Europe, tracking U.S. trend

Fresh on the heels of the news of a disappointing quarter for biotech investing in the U.S., Dow Jones VentureSource has done the math for Europe and come up with an equally dispiriting set of stats. 

Biopharma was the dominant category in the continent's healthcare industry, accounting for 26 deals that raised 108 million euros--out of 137 million euros for all of healthcare--compared to the same period a year ago. That represents a 16% drop in deals and a whopping 66% plunge in cash.

On the bright side, though, Europe saw a number of new funds come together in recent months. The Wellcome Trust has created a substantial new fund while Sir Chris Evans has been working at gaining government cash to back new ventures in Wales. Index Ventures, meanwhile, has joined with GlaxoSmithKline ($GSK) and J&J ($JNJ) on a new fund for startups, primarily in Europe. And the British government has assembled its own biopharma fund. That trend played out across all sectors for the European venture community.

"The difficult fund-raising environment and shrinking number of exits means less money is flowing into venture firms and, therefore, less is flowing out," said Jessica Canning, global research director, Dow Jones VentureSource. "But there are some positive signs. European venture fund-raising rose 8% in the first quarter and financing deals didn't drop as significantly as investment which means VCs are still finding companies they want to support."

Last week Thomson Reuters reported that venture investing in U.S. biotech companies plunged 43% in the first quarter of the year compared with the strong numbers posted for the last three months of 2011. Analysts at the National Venture Capital Association and PricewaterhouseCoopers tracked 99 deals that attracted $780 million in investments.

- here's the press release

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