The year 2014 was a great for private biotech.Venture capital (VC) investment into the biotech sector as a whole—from recent startups all the way to enterprises in late-stage financing—jumped to a record $9 billion. The number of series A financing rounds also remained strong.
Overall, investments for full year 2014 in the Life Sciences sector rose to the highest level since 2007 with $8.6 billion invested into 789 deals, a 29 percent increase in dollars but a 3 percent drop in deals compared to 2013. Biotechnology investment dollars rose 29 percent compared to 2013 to $6.0 billion, while the number of deals decreased 4 percent to 470 deals, making it the second largest investment sector for the year in terms of dollars invested, behind the Media and Entertainment sector. The Medical Devices industry finished 2014 up 27 percent in dollars to $2.7 billion, and the number of deals remained relatively flat in 2014, compared to 2013.
Venture capitalists invested $48.3 billion in 4,356 deals in 2014, an increase of 61 percent in dollars and a 4 percent increase in deals over the prior year, according to the MoneyTree™ Report by PricewaterhouseCoopers LLP (PwC) and the National Venture Capital Association (NVCA), based on data from Thomson Reuters. In Q4 2014, $14.8 billion went into 1,109 deals. Much of this fervor is attributed to the hot biotech IPO market—a receptivity so robust it’s less a window and more a hole blasted through the wall—as a strong IPO market tends to draw in VC funding. When its IPO market whirred to life 2.5 years ago, a needful industry warily wondered how long it would last. Now the question is, when the eventual correction comes, how will it affect private investment in biotech?