Financing Private Biotechs in 2005: Following the Money

According to Windhover's Strategic Intelligence Systems (SIS), private biotech companies in 2005 managed to pull in nearly $3.8 billion in equity financing. (Debt rounds, such as the $80 million raised by Jazz Pharmaceuticals Inc. in June 2005, have been excluded from this analysis.) [See Deal] A look at where VC money was going by round—how much cash was invested in Series A rounds versus how much went toward boosting existing portfolio companies, for example--suggests that while total financing was spread evenly throughout the private company life cycle, the average rounds for maturing private firms had increased significantly. (See "Biotechnology Fundraising Reflects Bigger Start-Ups, Fewer IPOs in 2005," START-UP, December 2005 Also see "Biotechnology Fundraising Reflects Bigger Start-Ups, Fewer IPOs in 2005" - Scrip, 1 December, 2005..)

But what kinds of companies did VCs support in 2005? Analyzing VC investments in private companies last year suggests that...