Venture Capital Funding for Biotech Plummets in First Quarter

Venture capitalist (VC) spending in the biotechnology industry dropped sharply during the first quarter, as venture firms looked to bring more balance to their funding initiatives, according to a new survey.

Biotechnology companies received $631.6 million in venture capital during the first quarter, a decline of nearly 50 percent from the fourth quarter of 2004 and of 31 percent from last year's first quarter, according to the latest MoneyTree Survey sponsored by PricewaterhouseCoopers, the National Venture Capital Association (NVCA) and Thomson Venture Economics. The number of venture capital deals involving biotechnology firms dropped from 98 in the fourth quarter of 2004 to 68 in the first quarter.

Overall VC spending in the life science industry also fell during the first quarter, dropping to $1.1 billion, compared to $1.6 billion in last year's fourth quarter. The first-quarter figure represents the lowest level of life science funding since the first quarter of 2003, according to the NVCA.