Biotech inspires jump in healthcare VC activity in Q2

As biotech deals sizzle, venture investors took more gambles on healthcare ventures in the second quarter than they did a year ago, according to data from CB Insights. And the data come amid a comeback in life sciences IPOs and a burning desire from pharma to gobble up the hottest assets from startups.

Healthcare venture investments hit $1.8 billion in the second quarter through 151 deals, topping the $1.5 billion such companies raised in 142 deals in the same period a year ago. Those deals include investments in biotech, medical device and diagnostic companies, according to CB Insights. One quarter doesn't make a trend, but the data show that VC activity in life sciences could recover from a disappointing 2012. 

Many investors have been keeping a close eye on biotech IPO activity, which increased tremendously in the first half of this year with 22 completed deals and more in the pipeline, FierceBiotech Editor-in-Chief John Carroll reported. Through the latest spate of initial public offerings, many venture investors such as Third Rock Ventures, Kleiner Perkins Caufield & Byers and other have been rewarded for bets made on biotech companies over the last 5 years or so.

Since the financial meltdown in 2008, many traditional backers of venture funds have pulled back their support from the industry, prompting some venture firms to conserve their limited capital for investments in less risky sectors than therapeutics. A comeback for IPO exits and improved VC fund performance could restore confidence in venture firms. And that would benefit startups.

We will update our website later this week, or as early as today, with sector-specific VC totals for biotech companies during the second quarter.

- check out CB Insights' report

Suggested Articles

CNS Pharma says berubicin is the first anthracycline drug to cross the blood-brain barrier and could transform treatment of the highly invasive brain tumor.

Grid Therapeutics is planning to start trials of its lead cancer immunotherapy GT103 next year after raising $5 million in second-round financing.

The IPO comes as the Flagship startup prepares to test its lead inflammatory disease and anticancer microbial strains in humans.