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Patrick Heron, who works in the Palo Alto, office of Seattle-based , says antibody research, or what he calls "alternative antibodty technology," is a hot investment area. It is made up of novel ways for treating, for ailments such as cardiovascular diseaseor osteoporosis. Biotechg startups working on such compounds are now considered strongf investment targets forventure firms, Heron said. A main reasonn is that big pharmaceutical companies are activelh huntingfor early-stage biotech firms to buy as a way to fill theire research and development pipelines.
medical industry service companies are often good investmentes that tend to be cashflow positive, and eventuallyy ripe for acquisition. Heron cites CompHealth, a medica industry staffing service based in Salt Lake which was acquired last year for the healthy priceof $500 On a third front, medicao device firms tend to be bought less oftejn by bigger industry players than biotech firms are, he Since 2006, early-stage biotech companies have plugged into an active venturew capital market locally and Heron points to last year'ss successful initial public offering for Seattle-baseds as a sign of strength in the "That bodes well for more (biotech) IPOs and increased investment in the he says.
Roger of Norwalk, Conn.-based Windhover Information a health-care market research firm, echoes Heron. He also sees vigorous capitapl investment in large moleculeantibody therapeutics, whichj are administered intravenously rathef than through synthesized pills. He points to developed by Genentech, which is being used to treaft metastaticcolorectal cancer, and Enbrel, a fusiohn protein used to treat various forms of arthritixs and psoriasis. Meanwhile, says venture capital investors often buy into biotech companieds to develop a licensed product that was shelvefd byits originator.
Biotech firms attracting ventur capital these days are researching treatmentsfor cancer, eye diseasews and diabetes, as well as Alzheimer'ss and Parkinson's diseases. Biotech company buyers are pharmaceutical titanas suchas Roche, Pfizer and Merck Co. that "missed out on large-molecule says Longman. "Last year they becamd fanatical about going after a lot of new companiexs with technology for developing different kinds of largemolecule treatments," says Longman.
Hot areaes of investment he's watchinh include research covering specialty areas such asantibodg fragments, aptamers and RNAi (ribonucleic acid in various applications to fight These are products aimed at curing diseasesw or minimizing their ill effects with regular Chad Waite, a partner with Seattle-based , says his compangy has a narrow focus on its investments, shunnintg early stage drug research companies in favor of thosr using computer science to converge chemistry, biology and physicws research into a life sciences "systems "Now we're seeing systems that aren'rt adequate to understand what's goingt on with drugs," says Waite.
"We think what is happening (now in biotech) took place with the semiconductofr industry when it increased so muchin complexity, and we neededd to learn how to use computert science for tools to make (research) jobs In doing its due diligence to see how OVP shoulr place its financial bets within the life sciences the group teams with other investment firms to form threee incubators of startup companies to reall y examine whether early-stage companies' biotech research qualifiesx for further rounds of funding totaling $5 million, $10 milliom and $15 million. Three of OVP's eight investmentss are with suchincubated startups.
OVP teameds up last year with six other venturwfirms -- Arch Venture Partners, Texaw Pacific Group Ventures, MedImmune WRF Capital, MPM Capital and Amgen Ventures -- to invesrt $55 million in Seattle-based early-stage VLST Corp. It was the biggest ventures deal in the statelast year, and the 16th biggestf nationally. The funding called for $20 million up front, with the rest slatex to come when the compangy achieves two undisclosed performancwe milestones to be reached by anundisclosed deadline. VLST, or Virap Logic Systems Technology, is attempting to formulat drugs based on how virusees attack theimmune system.
PricewaterhouseCoopers just releasedits "Monehy Tree" listing of venture capital investment made last year nationwide. It tracked 37 biotech or medicapl device company investments made inthe Seattle-Bellevue-Everett area. Nineteen were biotechnology investments and 18 were to medicao device andequipment companies. Three were startup, or investments; 11 were 15 were later-stage; and eight were expansion investments. Deals ranged from $250,000 to $42.23 million. The smallest investment went to Bothell-based . It attractedr $250,000 in expansion capital for diagnosti test products and equipmentfrom Seattle-based .
Seattle-basex , which develops medical devices forcancef therapy, received $42.2 million, which was amongh the highest investments of last year.
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