Friday, 14 December 2012

How bad a year has 2012 actually been for genomics investments?

In August, I published a post on how, despite a scarcity of biotech venture capital, there seemed to be a fair amount of VC funding specifically for genomics, at least compared to previous years.

I received a number of fair criticisms for this post. The most important one was that VC investments in the first half of the year are not a good predictor of investments in the second half, as VCs prefer to invest in certain months due to tax reasons.

This is why I have updated and re-analysed my data, and it turns out that my linear extrapolation of VC investments until the end of the year is a reasonable fit to the actual investments ($392m until the end of 2012, whilst the extrapolation suggested $412m). For more information on my methodology, please see my previous post on the topic.

Click on the figure to enlarge. Number of investments in genomics companies, average investment value, and total genomics investments, 2006-12.

The implication is that more money has been invested in my panel of 72 genomics companies than at any time since 2006. This is however due to fewer, but larger deals than in previous years. Whilst it is true that the number of investments in genomics companies for 2012 is probably going to be the lowest since 2008, the average amount invested is higher than in any previous year.

For genomics startups this means that it may be harder to get funding, but that once you get it, it will be generous.

By the way: The largest single genomics investment since August, and  one that has bypassed me completely, was $58m for CardioDx, which is a self-described pioneer in the field of cardiovascular genomic diagnostics. The money comes from more than a dozen different backers.

Another criticism was that I don't properly define what a genomics company is, and that this may actually be an arbitrary term. This is something I'm planning to address in one of my next posts.

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