National biotech investing surges in June

Investment in biotechnology nationwide increased sharply in June, inspiring hope for a resurgence of interest in the sector by venture capital and public markets.

June's sum total of $2.3 billion in investments rivals the combined $3 billion of the previous five months. At such a pace, the industry will outperform last year's total of $8.7 billion invested in biotech nationwide, according to Scott Morrison, United States Life Sciences Leader for Ernst & Young in Palo Alto, as quoted in the Silicon Valley/San Jose Business Journal.

Such an increase in available venture capital would be a shot in the arm for Arizona, where capital investment fell during the first quarter of this year to its lowest levels on record, according to results from the MoneyTree Survey conducted by PricewaterhouseCoopers, Thomson Venture Economics, and the National Venture Capital Association. The results were reported in the Arizona Republic.

The majority of funds invested nationally in June consisted of $1.9 billion in convertible stock, with the remainder composed of $155 million in common stock follow-on investments, $116 million in PIPES--private investment in public equity--and $126 million in venture capital funding, according to Ernst & Young data reported in the Business Journal.

The sudden increase was spurred by a run of good news in the industry, including drug approvals, a new FDA director, and the end of the war in Iraq, according to Nina Kjellson, principal at InterWest Partners in Menlo Park, as reported by the Business Journal. "We are very much driven by public markets," she explained.

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For more information:

"June boon for biotech," Silicon Valley/San Jose Business Journal, 7/11/2003

"Arizona companies hit new low for investment," Arizona Republic, 7/16/2003