Reports

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Pharmaceuticals

Pharmaceutical fundings decreased to $474 million, representing a 2% decrease in amounts funded among a 9% decrease in the number of companies funded versus the previous quarter.

Corporate investors continued to be active in the sector. Novartis and other venture capital firms invested $22 million in the series D round for Tokai Pharmaceuticals. Tokai said it would use the funding proceeds to advance its lead development candidate into the clinic for the treatment of advanced prostate cancer.

Reata Pharmaceuticals closed its series F financing round at $47 million from an undisclosed group of investors. Reata is focused on developing oral drugs that treat inflammation. Its lead project is to help treat chronic kidney disease (CKD).

Medical Devices

Venture capital funding for Medical Device companies sharply reversed its previous quarterly decline, with 85 companies receiving $867 million during the quarter, a 44% dollar volume increase.

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

Autonomic Technologies $20 million
Avedro $10 million
CeraPedics $15 million
Embrella Cardiovascular $5 million
Inspire Medical Systems $17 million
Transcend Medical $35 million
VytronUS $11 million

Small Bone Innovations raised $144 million in the largest funding round of the quarter, its fourth round. Goldman Sachs was among the investors. Small Bone is an orthopedic device company that is exclusively focused on treating small bone and joint health problems.

Paylon Medical received a total of $24 million in multiple tranches of its series A financing round. Paylon said it would use the funding proceeds to finance a multisite clinical study of its programmable implantable drug delivery system, which delivers targeted doses of pain medication to specific spinal areas.

Active Implants secured $10 million in its third round of financing from undisclosed investors. The company is developing new materials that may lead to longer lasting implants, provide more resistance to deterioration and potentially better protect against infection. Proceeds purposes from the funding round were not disclosed.

Table 1

Venture Funding Activity – 2nd Quarter 2009


Industry Total
Amount
Funded
% Change
Vs. Prior
Quarter
Number of
Companies
Funded
% Change
vs. Prior
Quarter
Biotechnology $643 Million + 2 % 60 - 17 %
Pharmaceuticals $474 Million - 2 % 39 - 9 %
Medical Devices $867 Million + 44 % 85 + 39 %
Total $1.98 Billion + 15 % 184 + 5 %

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