U.S. life sciences companies raised nearly $7 billion in venture capital in 2010, a 3 percent increase over the $6.8 billion raised in 2009. It also beat the amount raised in 2008 numbers, when companies raised a total of $6.9 billion in 373 deals.

 

The number of completed rounds in 2010 rose 10 percent to 588, from 534 rounds in 2009, but the average deal size fell 6.3 percent to $11.9 million, from $12.7 million in 2009, signaling a possible shift to a greater number of earlier stage deals. In 2008, the average deal size was $18.4 million.

 

Companies located in the San Francisco Bay Area continued to raise the greatest amount of dollars, with a 28.7 percent share. The two other major biotech centers, Boston and San Diego, however, saw the greatest increases in capital raised over the previous year.

 

The biggest category gains were in the Industrial/Agricultural sector, which saw a 250 percent increase in the amount raised. Much of this increase can be attributed to corporate investments in a handful of companies such as Amyris, which raised $186.6 million in venture and corporate capital before its initial public offering; Solazyme, which got a strategic investment from agribusiness Bunge; and LS9, which raised a large chunk of capital from private equity firm Black Rock.

 

Diagnostics companies saw a 42 percent rise in year-over-year dollars raised, with companies raising $500 million in 62 deals. The therapeutics category continued to lead, making up 38.3 percent of total capital raised in 2010, or $2.7 billion in 217 deals. This number was down 17.2 percent from 2009 comparable figures, which stood at $3.2 billion raised in 196 deals.

 

Medical device and medtech companies comprised the second largest category, with $1.8 billion raised in 131 deals, down 23 percent from 2009 when $2.3 billion was raised in 181 rounds. Companies in the digital health space, a subcategory of medical devices, garnered $346 million in 28 deals.