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Investment Boom

Cue up "We're in the Money," please, this time for life sciences businesses. Venture Capital funds are flowing freely into the life sciences sector so far this year – up 25 percent by value in the second quarter, according to a new analysis.

The new MoneyTree report from PriceWaterhouse Cooper's and the National Venture Capital Association finds that VCs pumped $2.5 billion into life sciences deals in the second quarter, compared to $2 billion in the same period last year.

The biotech sector reeled in the biggest haul in the life sciences sector for the quarter – raising $1.84 billion – with the $200 million Intarcia Therapeutics and $119.5 million Digital Health deals accounting helping to drive the field.

The medical device industry received $649 million through 73 deals in the quarter, an increase of 23 percent in dollars over the same period in 2013.

The life sciences investment boon is not isolated, as VC funding overall grew 81 percent year over year in the second quarter, and life sciences accounted for 19 percent of the VC pie, compared to 28 percent in the year-ago period.

"The uptick in VC investing in Q2 is a direct reflection of the activity we're seeing in the public markets," says Greg Vlahos, a life sciences partner at PwC.
Interestingly, the number of life sciences companies getting first-time funding fell by 20 percent, the MoneyTree report finds, and the number of deals in the sector also dropped by 18 percent.

"The competition for dollars among the next generation of life science businesses remains, and businesses looking to attract VC investment need to have compelling stories and a roadmap for their product strategies to showcase their path forward," Vlahos says.