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Pharmaceutical fundings decreased to $484 million, representing a 33% decrease in amounts funded among a 12% decrease in the number of companies funded versus the previous quarter.

Corporate investors were active in the sector. Novartis and Roche invested $8.4 million in the series A round for Alios BioPharma. Alios is developing a complementary set of platform technologies for a variety of viral diseases.

Anacor Pharmaceuticals closed a new financing round at $50 million in the largest financing of the quarter from a large syndicate including corporate investor GlaxoSmithKline. Anacor said it would use the funding proceeds to further develop its product pipeline using its boron chemistry platform, which it says is helpful in the treatment of inflammatory and infectious diseases.

Medical Devices

Venture capital funding for Medical Device companies continued its previous quarterly decline, with 61 companies receiving $604 million during the quarter, a 9% dollar volume decrease.

There were a significant number of third round fundings (Series C), which included the following companies:

Ardian $47 Million
Aureon Labs $23 Million
WaveTec $20 Million
Primaeva $6 Million
GI Dynamics $15 Million
SynergEyes $13 Million

Ardian raised $47 million in the largest funding round of the quarter, led by corporate investor Medtronic and including other undisclosed investors. Ardian has developed what it calls a unique technology to help block the renal sympathetic nerves that contribute to hypertension.

Acclarent landed $26 million in its fourth round from strategic investor Johnson & Johnson Development Corporation and existing venture capital investors to continue to commercialize its Balloon Sinuplasty technology for the treatment of chronic sinusitis.

OrthAlign secured $7.2 million in its first financing round from a syndicate of institutional venture capital investors. The company will use the funding to finalize product development and bring to market its surgical knee alignment device.

Table 1

Venture Funding Activity – 1st Quarter 2009

Industry Total
% Change
Vs. Prior
Number of
% Change
vs. Prior
Biotechnology $628 Million - 18 % 72 - 12 %
Pharmaceuticals $484 Million - 33 % 43 - 12 %
Medical Devices $604 Million - 9 % 61 - 25 %
Total $1.72 Billion - 16 % 176 - 17 %

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