Venture Capital Pumps Big Money Into Biotech
2 CommentsBy Ed Silverman // January 21st, 2008 // 7:45 am
Venture capitalists pumped a record $9.1 billion into privately held US biotechs and medical device makers last year, in hopes of making discoveries they can sell to larger drugmakers, Bloomberg News reports.
Biotechs and medical device makers raised 20 percent more cash in the US last year than in 2006, according to a report by PricewaterhouseCoopers and the National Venture Capital Association. “A grim prognosis for Big Pharma is actually music to our ears,” Sherrill Neff, founding partner of Quaker Bioventures, a fund with $600 million under management, tells Bloomberg. “We are in the early stages of a deepening symbiosis between venture-backed biotechnology companies and large pharma.”
Venture capitalists invested a total of $29.4 billion in 3,813 companies across all industries, the most since 2001, according to the report. About 31 percent of the cash went to biotechnology and medical devices, a record share of venture investment, according to the report. Software investment rose 2.7 percent to $5.3 billion, while Internet companies raised $4.6 billion, a 12 percent increase, according to the report.
ol cranky
The downside to VCs pumping money into and comprising the board of biotechs is that I’m coming across some companies that do not have a non-employee on the board who has any experience with developing drugs. This can lead to broad compliance issues due to the lack of understanding of the need for SOPs and regulatory compliance, especially if the executive board members don’t have that sort of understanding and/or are shady enough to willfully mislead the board. It’s amazing how many less than ethical people on the senior management team will find ways to circumnavigate regulations and pitch unrealistic budgets and plans to the board (which may lead to more egregious compliance violations to meet an unrealistic goal) all because nobody on the board can/will know any better. This, of course, is exacerbated when the senior management team isn’t concerned about getting busted because the company will fly under the radar of the feds.
harry
it is another disgrace. Big pharma launder funds through venture capatalists, who then fund small start-ups who use patients as guinea pigs in the US and worldwide. These companies hide safety data to generate promising results then are swallowed up by the big giants when experimentation continues with a larger group of patients and many preexisting safety issues. These biotechs collaborate with IVY league doctors and MBAs, they are in the same boat, make buckets loads of money and harm patients in the process. The FDA look the other way.