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Fenwick & West Life Science Venture Financing Survey Shows Mild Improvement in Valuations Amid Overall Difficult Financing Environment

Tue, 09/11/2012 - 3:43pm
Bio-Medicine.Org

MOUNTAIN VIEW, Calif., Sept. 11, 2012 /PRNewswire/ -- Fenwick & West LLP, one of the nation's premier law firms providing comprehensive legal services to high technology and life science clients, today announced the results of its First Half 2012 Life Science Venture Capital Survey.

The First Half 2012 Survey analyzes the valuations and terms of venture financings for 186 life science companies headquartered in the United States that reported raising capital during the first half of 2012.

"For the first half of 2012, up rounds outpaced down rounds 53% to 19%, with 28% flat. This is a modest improvement over results from 2011, which averaged 47% up rounds and 25% down rounds, with 28% flat," said Matt Rossiter, a partner in the firm and co-author of the survey.

An up round is one in which the price per share at which a company sells its stock has increased since its prior financing round. Conversely, a down round is one in which the price per share has declined since a company's prior financing round.

The Fenwick & West Life Science Venture Capital Barometer™ – which measures the change in share price of life science companies funded during the year compared with the share price of their previous financing round – showed average price increases of 19% and 26% for Q1 and Q2 of 2012, in comparison to average price increases of 4% and 11% for Q1 and Q2 of 2011. 

"The Barometer results have continued to trend upward during 2012," said Rossiter. "This is a positive sign, and suggests that startups are continuing to develop promising technologies that can justify a step up in valuation. However, it is important to keep in mind that fewer life science financings are occurring, and the Life Science Barometer results continue to trail results for other industries covered by our Silicon Valley Venture Capital Survey."    <
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