Marked by big balance sheets and big checks, corporate venture investing in tech is hot again. Can the same be said of corporate venture capital financing in the healthcare sector?
Over the past four quarters, CVCs participated in 145 deals in the healthcare sector (medical devices, biotech, drug & pharma) totaling $2.2B. On a year-over-year basis, deal activity was up 10% and up 3% on the funding front. While Q1’14 funding was low, it follows a trend of slow Q1s. That said, the 38 deals in Q1’14 represented a 31% increase from the same quarter a year prior and funding was also up modestly quarter-over-quarter.
The Most Active Healthcare CVCs – Novartis Venture Funds Leads
From Q1’11 – Q1’14 Novartis Venture Funds, the venture arm of Novartis that focuses on the development of therapeutics and medical platforms, was the most active CVC in terms of unique healthcare company investments, with NVF backing over 30 companies. Some of their recent investments include participation in the $49M Series B for Thesan Pharmaceuticals, a biotech company focused on the treatment of dermatological conditions, as well as Covagen’s $47M Series B.
Medical Devices Capture Highest # of Deals from CVCs
CVC Healthcare investment has been mainly focused on Medical Devices, Drug Development, and BioTech, with the three industries accounting for 74% of all deals over the past 13 quarters. Biocartis’ $95.7M Series C led all Medical Device CVC deals in terms of round size, while Merrimack Pharmaceutical’s $77M growth equity round which included OrbiMed Advisors and Mitsubishi UFJ Capital among others, and Ultragenyx Pharmaceutical’s $75M Series B were the largest deals for Drug Development and BioTech respectively.
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