Venture-Backed Life Science Companies Hit 7 Year Highs in Large Acquisitions

Company news  |  July 19, 2012

Silicon Valley Bank Study of Life Science M&A Exits Reveals Improving Trends for Life Science Investment

SANTA CLARA, Calif. – July 19, 2012 – Silicon Valley Bank, financial partner to technology and life science companies and their investors worldwide, released a study today that examines the merger and acquisition behavior of private, venture capital-backed biotech and medical device companies.

Based on an analysis of private merger or acquisition transactions of US venture capital-backed companies since 2005, Silicon Valley Bank found a rebound in "Big Exits" among life science companies. Big Exits were defined as acquisitions where the upfront payment totaled in excess of $50 million for device companies and $75 million for biotech companies:

• 35 Big Exits in 2011: seven-year high  
• $12.5 billion invested in life science: seven-year high  
• Increased upfront deal values  
• Indications receiving the largest investments since 2005  
  • Biotech: Oncology, CNS, Anti-Infectives
• Device: Diagnostics, Orthopedics, Cardiovascular
• Sectors with the highest multiples, versus dollars deployed since 2005  
  • Biotech: Respiratory, Cardiovascular, Oncology
• Device: Surgical, Vascular, Tools

A tandem report, examining the current and emerging trends in life science investments, "First Mover Advantage: The Case for Investing in Life Science," is also available.

"Our data shows positive momentum in exits in the life science industry," said Jonathan Norris, Managing Director with SVB Capital's Venture Capital Relationship Management team and author of the report. "In 2011 we saw the most VC-backed big exits, generating the largest amount of liquidity in biotech and device, since we started tracking this data in 2005. While this does not correct the poor overall returns for the last decade, these dynamics position life science as an attractive investment opportunity now and in the future."

Silicon Valley Bank works with 50 percent of life science-focused VC firms and life science companies nationwide, specializing in companies in biotech and medical device fields.