Trying to understand the driving factors behind the trends of life science investments in 2012, I was wondering if VC & CVCs behave differently or if one determines the trend & other follows it largely - which I realize is putting it too simplistically and perhaps the VC operates as one organism.
However, I believe that, with the genericization troubles looming large, the big pharma started to rationalize the product development strategies by taking into account parameters which hitherto were not given a serious thought.... foremost of which I'd guess is consumer behavior - This new diligence I expect will translate into the way big pharma CVCs have been building their portfolios over past 3+ years.
Based on this premise, I tried to analyse the PVI portfolio & see if the data throws-up any tangible trend. Since I was unable to find the exact value of the funding in most cases (the funding rounds involved more than one VC, hence), I stayed with number of investments & hopefully the trend will still make some sense;
A snap-shot of investment across innovation categories:
Some trends:
- Medical Diagnostic investments equal Drug Discovery numbers (& not in all cases it is merely companion diagnostics related investment)
- Enthusiasm for Medical devices & equipment is much lower than the overall average in 2012 (~50%) - However this I feel is still significant, as logic says a medcines company would be more interested drugs than devices
- Interesting appearance of investments into companies that'd contribute to research /business/ operational advantages for the investing big pharma - surely pro-logical, but interesting nonetheless & showcases the emerging realities in sustaining business
- Drug discovery at 30% only marginally higher than the 23% overall in 2012
Within the drug discovery investment, the innovation sub-categories point to a definite preference to go after platform technologies that'd generate leads in multiple therapeutic domains/ indications;
Overall, very interesting & I will hopefully continue this line of thought with another post or two.
Comments?
1 comment:
it may not be totally connected, but is in some fashion relevant to my post above..... check out the blog post by Bruce Booth @ http://lifescivc.com/2012/06/contrarian-opportunities-in-biotech-venture/ and my comment on the same, reproduced below....
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I know I'm late to the party, but allow me to share a few views nonetheless...
I fully agree with you that VCs tracking (with an eye to invest, sustain & monetize)
small players within the de-emphasized therapeutic domains of big pharma.
Now, while your 'contrarian view' & David Grainger's 'asset favouritism' both are
essentially saying the same & rightly so, I'd opt for the simplistic
reasoning that what a big pharma de-emphasizes, it'd right away or atleast eventually consider for acquisition - just that premise straightaway improves prospects of all
spin-offs & biotechs working in that domain.
I also notice that the domains you are bullish on in a way represent the
'management therapies' than 'curative therapies' - despite the repeated
incidence of late-stage & post-approval bummers in categories like CNS,
Obesity & CV, the big pharma continues to dream (despite the
deemphasization internally...) of an acquisition that'll assure them the large
volumes of business over a long term, assured only by the 'management
therapies'
Given this derisked strategy, big pharma seems to be putting their money in
business-sustaining ventures... almost a paradigm shift from focusing heavily
on drug discovery!! - I'll be happy if you, your readers here can read through
my latest blog post on Pfizer venture Investments & comment. http://vishrasayan.blogspot.in...
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