Health Care Investments on the Rise in California
Biopharmaceutical and medical device companies have generated the largest increase in venture capitalist investments nationally, as well as in parts of California over the past year, the San Jose Mercury News reports (Loizos, San Jose Mercury News, 4/23).
A report by Thomson Financial found that biotechnology was the biggest sector for VC funding in the U.S., accounting for $1.5 billion of the $7.1 billion in funding nationwide in the first quarter of 2007.
In addition, a separate survey by Ernst & Young and VentureOne reported $2.8 billion in VC funding for health care firms for the quarter (Bigelow, San Diego Union-Tribune, 4/24).
Jessica Canning, director of global research at VentureOne, said, "It makes sense that if there's a spike in health care investment, there would be a spike in product-development stage companies."
Venture capitalists nationwide invested $1.8 billion in the first quarter this year into biopharmaceutical companies, up from $861 million in the first quarter last year. Investments in other health care businesses in the Bay Area over the same time period increased by 101% to $750 million from $372 million (San Jose Mercury News, 4/23).
Thomson Financial estimated VC funding in San Diego County at $686.3 million for the quarter, more than double investments from the same period a year earlier. Another study found that 88% of VC funding in San Diego County went to health care firms (San Diego Union-Tribune, 4/24).
Robb Browne of Ernst & Young said the rise in health care spending is because of an aging population and "people's increased focus on health."
Both Canning and Browne noted that health care was the only sector to experience significant increases in the first quarter (San Jose Mercury News, 4/23).