VC-backed tech IPO activity has been anemic (while private IPOs have boomed), but the same cannot be said for healthcare IPOs which includes life science deals to biotech/pharma and medical device companies. 2014 saw more than 60 US-based VC-backed Healthcare companies go public, a 65% increase from 2013. Nearly half of all VC-backed healthcare exit activity in the US was in the form of an IPO last year.
Biotechnology has slowly been gaining exit share among VC-backed healthcare exits, taking 20% of exit share in 2014 compared to half of that in 2010. Drug development has also been slowly increasing, taking the dominant share in 2014 with 24% of all VC-backed healthcare exits.Conversely, Pharmaceuticals have taken the largest hit declining materially since 2010.
In terms of amounts raised prior to exit, healthcare follows a similar barbell’ization trend as we’ve observed with tech companies. More than 110 healthcare companies raised less than $20M prior to exit, with the number dropping steeply when moving into the $20M-$40M bracket. The number of companies raising in each bracket leading up to $100M steadily decreases, until it spikes to 90 companies that raised more than $100M prior to exit.
Boston Scientific Corporation was the most active acquirer of VC-backed healthcare companies over time with the pick up of companies such as Xlumena and Vessix Vascular. Shire, a specialty biopharmaceuticals company, followed closely behind in acquisitions with more than 5 since 2010.
| Rank | Acquirer |
|---|---|
| 1 | Boston Scientific Corporation |
| 2 | Shire |
| 3 | Pfizer |
| 3 | Takeda Pharmaceutical |
| 3 | Bristol-Myers Squibb |
| 3 | Teleflex |
| 3 | C.R. Bard |
| 3 | Covidien |
| 9 | Medtronic |
| 9 | Baxter International |
| 9 | Roche Holding |
| 9 | Gilead Sciences |
| 9 | Techne Corporation |
| 9 | Abbott Laboratories |
| 9 | The Medicines Company |
OrbiMed Advisors, a healthcare dedicated venture capital firm based in New York, saw the most exits of any healthcare investor since 2010. Exits in their portfolio include Seragon Pharmaceuticals and SAGE Therapeutics. New Enterprise Associates and RA Capital Management followed behind OrbiMed.
| Rank | Investor |
|---|---|
| 1 | OrbiMed Advisors |
| 2 | New Enterprise Associates |
| 2 | RA Capital Management |
| 4 | Sofinnova Ventures |
| 4 | Deerfield Management |
| 4 | Aisling Capital |
| 7 | Novo Ventures |
| 7 | Kleiner Perkins Caufield & Byers |
| 9 | TPG Biotech |
| 9 | MPM Capital |
| 9 | Adage Capital Management |
| 9 | Alta Partners |
Want more data on healthcare financing and exits? Check out our venture capital database below.
Photo credit to TaxRebate.org.uk