PwC
Venture Capital Investment
in the Biotechnology
Industry
PricewaterhouseCoopers / Venture Economics /
National Venture Capital Association
MoneyTree Survey
March 2002
About The Quarterly MoneyTree Survey
• PricewaterhouseCoopers has joined forces with Venture Economics and
the National Venture Capital Association to produce MoneyTree Survey
• ‘Core’ measure of equity investments in venture-backed companies in the
United States
• Companies have received at least one round of financing involving a
professional VC firm or equivalent
• Captures: tranches, not term sheets, foreign VCs, qualified private
placement
• Excludes: debt, bridge loans, recaps, roll-ups, IPO's, Pipe's, leasing, etc.
• MoneyTree™ Survey in its 8th year
• Results online at www.pwcmoneytree.com, www.ventureeconomics.com,
www.nvca.org
2
PricewaterhouseCoopers/Venture Economics/National Venture Capital Association MoneyTree™ Survey
Let’s put the role of
venture capital in the
biotechnology industry
into perspective…
3
PricewaterhouseCoopers/Venture Economics/National Venture Capital Association MoneyTree™ Survey
2000
1998
1996
1994
1992
1990
1988
1986
1984
1982
$100,000
$90,000
$80,000
$70,000
$60,000
$50,000
$40,000
$30,000
$20,000
$10,000
$0
1980
$ Million
Venture Financing Exceeds Federal NonDefense R&D Budget
Source: PwC/VE/NVCA MoneyTree™ Database & AAAS Report Citing 2002 Federal Budget. Note Federal
R&D statistics are constant 2001 dollars
4
PricewaterhouseCoopers/Venture Economics/National Venture Capital Association MoneyTree™ Survey
MoneyTree: Total Investments in
Biotechnology- 1995 - 2001
($ in billions)
$4.0
$3.5
$3.5
$3.0
$3.0
$2.5
$2.0
$1.9
$2.0
$1.3
$1.5
$1.0
$1.1
$0.5
$0.5
$0.0
1995
1996
1997
1998
1999
2000
2001
# of Deals
138
177
227
265
238
264
243
% of all
Investments
10%
13.6%
6.9%
3.7%
3.5%
8.1%
5
11.4%
PricewaterhouseCoopers/Venture Economics/National Venture Capital Association MoneyTree™ Survey
Biotechnology Investments by Region
1995-2001
North Central
$221
35 Deals
($ in millions)
Northwest
$611.6
60 Deals
Midwest
$571.1
100 Deals
New England
$2,584.3
276 Deals
NY Metro
$853.6
79 Deals
Sacramento/N. CA
$27.9
6 Deals
Philadelphia Metro
$802.4
122 Deals
Silicon Valley
$3,632.6
323 Deals
LA/Orange County
$375.2
69 Deals
San Diego
$1,501.9
175 Deals
DC/Metroplex
$463.8
69 Deals
Southwest
$107.6
30 Deals
Colorado
$325.3
Alaska/
34 Deals
Hawaii
$0
0 Deals
6
Texas
$228.1
35 Deals
South Central
$47.9
4 Deals
Southeast
$778.2
118 Deals
PricewaterhouseCoopers/Venture Economics/National Venture Capital Association MoneyTree™ Survey
Biotechnology Investments by Region
Q4 2001
North Central
$13
5 Deals
($ in millions)
Northwest
$20
2 Deals
Midwest
$42
5 Deals
New England
$246
18 Deals
NY Metro
$174
3 Deals
Sacramento/N. CA
0 Deals
Philadelphia Metro
$55
4 Deals
Silicon Valley
$174
10 Deals
LA/Orange County
$23
3 Deals
San Diego
$82
6 Deals
DC/Metroplex
$98
5 Deals
Southwest
$2
2 Deals
Colorado
$65
Alaska/
1 Deal
Hawaii
$0
0 Deals
Texas
0 Deals
South Central
0 Deals
Southeast
$9
3 Deals
Total: $1,004 – 67 deals
7
PricewaterhouseCoopers/Venture Economics/National Venture Capital Association MoneyTree™ Survey
Investments by Industry
Q4 2001
# of
Deals
($ in millions)
$1,609
Software
$1,004
Biotechnology
$989
Networking & Equipment
Telecommunications
$982
Retailing/Distribution
$472
$380
Semiconductors
$320
IT Services
$307
Media & Entertainment
Medical Devices & Equipment
$285
$153
Industrial/Energy
211
36%
67
41.6%
77
(22.7%)
102
(3%)
85
(21.3%)
34
(9.9%)
57
(43.6%)
41
(23.7%)
52
7.2%
29
(2.7%)
9
NM
24
(31.4%)
18
46.1%
$148
Financial Services
Computers & Peripherals
$130
Consumer Products & Services
$94
% Change in
$ Amount
from Q3 01
Electronics/Instrumentation
$88
16
55%
Business Products & Services
$84
17
NM
7
NM
10
86%
Other
$56
$39
Healthcare Services
$0
$350
Visit www.pwcmoneytree.com
for Industry Definitions
8
$700
$1,050
$1,400
Q4 2001 Totals: $7,138
$1,750
856
( NM = Not Meaningful)
1.9%
PricewaterhouseCoopers/Venture Economics/National Venture Capital Association MoneyTree™ Survey
Investments by Industry Percent of Total U.S. Investments
(% of Total Dollars)
28%
Top 5 Industries – 1995 to 2001
26%
24%
22.5%
22%
20%
20.4%
18.8%
19.2%
18.0%
17.0%
18%
16%
18.4%
18.0%
15.8%
16.2%
15.3%
14.5%
14.3%
13.6%
14%
10.9%
10.2%
9.4%
11.3%
12%
10%
11.4%
11.4%
10.0% 10.0%
8.3%
7.1%
5.6% 6.4%
5.2%
8%
6%
9.2%
8.2%
6.4%
4.9%
4.8%
6.9%
3.7%
3.5%
4%
2%
0%
9
‘95 ‘96 ‘97 ‘98 ‘99 ‘00 ‘01
‘95 ‘96 ‘97 ‘98 ‘99 ‘00 ‘01
Software
Telecommunications
‘95 ‘96 ‘97 ‘98 ‘99 ‘00 ‘01
‘95 ‘96 ‘97 ‘98 ‘99 ‘00 ‘01
Networking & Equip. Retailing/Distribution
‘95 ‘96 ‘97’98 ‘99 ‘00 ‘01
Biotechnology
PricewaterhouseCoopers/Venture Economics/National Venture Capital Association MoneyTree™ Survey
Life Science Investments Percent of Total U.S. Investments
(% of Total Dollars)
15%
Life Science Sectors – 1995 to 2001
13.6%
12%
11.4%
10.0%
9.1%
9%
8.2%
7.6%
6.9%
6.2%
6%
6.0%
5.1%
4.9%
5.2%
4.3%
3.7% 3.5%
3.6%
2.7%
3%
2.2%
1.5%
0.4%
0%
’95
’96
‘97
‘98
‘99
‘00
‘01
Biotechnology
1995
10
‘95
‘96
‘97
‘98
‘99
‘00
‘01
Medical Devices and Equipment
1996
1997
1998
1999
‘95
‘96
‘97
‘98
‘99
‘00
1.0%
‘01
Healthcare Services
2000
2001
PricewaterhouseCoopers/Venture Economics/National Venture Capital Association MoneyTree™ Survey
Biotechnology Investments by Financing
Sequence - Q4 2001
# of
Deals
($ in millions)
$137
Fourth
$146
First
$176
Second
$214
Fifth & Beyond
$331
Third
$0
$50
$100
$150
$200
$250
$300
% Change in
$ Amount
from Q3 01
8
60%
20
(22%)
14
(40%)
15
48%
10
636%*
$350
* Abnormally high change due to a $150 million investment and a $70 million investment
11
PricewaterhouseCoopers/Venture Economics/National Venture Capital Association MoneyTree™ Survey
Average Biotechnology Deal Size Compared
to Average Deal Size for all Industries
1995-2001
($ in millions)
$15.0
$14.0
$13.0
$12.2
$13.0
$11.0
$10.3
$9.3
$8.6
$9.0
$7.0
$8.0
$6.2
$4.9
$4.8
$5.0
$4.4
$4.8
$3.6
$3.0
$3.2
1995
1996
1997
Avg. Deal
12
1998
1999
2000
2001
Avg. Biotech Deal
PricewaterhouseCoopers/Venture Economics/National Venture Capital Association MoneyTree™ Survey
Most Active Venture Investors in
Biotechnology - 2001
Venture Capital Firm
13
Location
Total Deals
J.P. Morgan Partners
Menlo Park, CA
13
MPM Capital
Cambridge, MA
13
InterWest Partners
Menlo Park, CA
11
Oxford Bioscience Partners
Boston, MA
10
Alta Partners
San Francisco, CA
10
Domain Associates
Princeton, NJ
9
Healthcare Ventures LLC
Princeton, NJ
9
Sprout Group
New York, NY
8
PricewaterhouseCoopers/Venture Economics/National Venture Capital Association MoneyTree™ Survey
PwC
Our Core Biotechnology Service Team:
Frank Feeman, audit partner
206/398-3562
Jon Kuchin, tax partner
206/398-3010
Dick Ottele, audit senior manager
206/398-3514
PwC
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