It's no secret--venture funding for medical device industries has become highly uneven at best. But the U.K.'s biggest charity outfit is stepping into the game, launching a £200 million ($325 million) fund that will help fill at least a few of the gaps.
Bloomberg reports that Wellcome's new Syncona Partners venture unit will seek investments, in part, in new medical device and diagnostics companies, with an eye also focused on drug development and information technology. Investments will range from U.S. $1.6 million to $32 million. Martin Murphy--a former partner from the MVM Life Science Partners venture capital firm, according to the story--runs the new enterprise.
As our sister publication FierceBiotech points out, while traditional venture funding sources decline, the Wellcome initiative offers a new option. It's also part of a larger trend, as other charitable organizations have increasingly jumped into the venture funding pool (see the Bill & Melinda Gates Foundation and others). Companies such as Johnson & Johnson ($JNJ) and Myriad Genetics ($MYGN) are also helping to fill that gap, investing in early-stage startups that might be good acquisition targets later on, assuming milestones can be met.
Venture funding for devices, diagnostics and drugs around the world has been sluggish for years now. In the U.S., medical device venture investing dropped in the 2012 third quarter by 37% in dollar terms and 27% in deal volume, the third consecutive quarterly drop, according to numbers from the National Venture Capital Association and PricewaterhouseCoopers. Observers believe the U.S. has some unique factors affecting this, including the medical device excise tax, reimbursement challenges and continued FDA regulatory delays.
- read the Bloomberg story
- here's FierceBiotech's take
Special Report: Top 10 VC device deals of Q3 2012