Q3 biotech venture investing makes a boisterous leap

The life sciences industry gained a blast of good news on the venture front today. The National Venture Capital Association and PricewaterhouseCoopers outlined a buoyant set of numbers for the industry, noting a nice spike in the amount invested in biotechs as well as the number of deals completed.

Using the figures provided by Thomson Reuters, the quarterly report concluded that total life sciences venture deals topped $1.7 billion in 181 deals in the third quarter--a bit more than a quarter of all investments tracked during the period. Excluding medical devices, biotech gained $1.2 billion of that for 116 companies, a hefty 64% increase in dollars and a 22% jump in deals.

That rate was even better than the same period last year, when biotech garnered $1.1 billion for 96 deals, an 18% drop in dollars and 20% decline in deals from the prior quarter. Here's the scoop on the Q3 numbers in the medical device industry by FierceMedicalDevices editor Mark Hollmer.

The Q3 biotech increase, though, couldn't overcome the grim downward trend for the industry this year. Overall, say the NVCA and PwC, life science investments for the first 9 months of the year are down 19% in dollars and 12% in deals from the same time period in 2011, which wasn't a great year.

Much of that riptide in venture investing could be tied to a miserable second quarter for venture investing. Only $754 million was scraped together for 90 biotech deals, a brutal 42% drop for an industry that relies on venture funds for its lifeblood. The basic trends in the venture industry haven't benefited biotechs, which have been afflicted with long development cycles and limited investor interest in IPOs--once the classic cash-out strategy for VCs. And in the long run, new institutional investing in the VCs has lagged.

There have been a few green shoots coming up on the bleak IPO front recently, though, as a surge in biotech values appeared to help a few developers go public recently. Provided the bubble doesn't burst soon, more biotechs could make it to the public market, which could in turn help inspire a new round of rounds. 

As the analysts noted, a lot of the quarterly increase came as a result of some big follow-on rounds for biotechs. As you can see in the list below of the top 10 rounds of the quarter, several high-profile developers like Relypsa, Bluebird Bio, and Aragon garnered sizable rounds over the last few months. A continued surge through the fourth quarter would help ease the constriction in investment capital that has choked developers for much of the year.

Want to see who's getting the money? Here's a look at the top 10 venture investments in biotech over the last quarter. -- John Carroll, Editor-in-Chief. Follow me on Twitter and LinkedIn.

Q3 biotech venture investing makes a boisterous leap

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