Signs of Life in Life Sciences VC

After a rough 1st quarter, the recently released OnBioVC 2Q09 Trends Analysis shows that life sciences VC funding increased year-over-year by 31%, totaling about $1.71B for 2Q09 vs. $1.18B for 2Q08. Funding for the quarter increased about 20% relative to Q1, which was approximately $1.43B. Not surprisingly, most of the money (almost $1B) went to later-stage companies (Series C and beyond).

It will be interesting to see what the NVCA/VentureSource Q2 results will be. I’m wondering if VC firms are rotating into life sciences deals or whether other industries will see a healthy increase in VC funding. I can see why VCs are interested in life sciences investments at the moment given the exit opportunities. I am a bit surprised, though, by the magnitude of the increase in life sciences funding compared to last year. Maybe LPs are loosening up faster than I expected, which is great for start-ups seeking capital.

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