Table of Contents
Trends in Healthcare Investments and Exits Mid-Year 20182
Mid-Year 2018 Key Highlights3
Healthcare Investments and Fundraising5
SVB Deep Dive: Tools Driving Synthetic Biology in Life Science18
Healthcare Exits and IPOs20
Biopharma Unicorns: 2013–201821
Second Half of 2018 Outlook 29
Glossary30
About the Authors31
Mid-Year 2018 Highlights: Investments
Pioneering Innovations, Drug Development Create Investor Excitement
Trends in Healthcare Investments and Exits Mid-Year 20183
At mid-year, U.S. healthcare venture fundraising
reached $4.5 billion, and is on pace to closely match
the 2017 record of $9.1 billion.
Investments in VC-backed biopharma continued to
surge, while device remained stable. Dx/Tools
investing decreased. Full-year 2018 investment in
venture life science companies likely will reach a
new high, surpassing the record $17.3 billion
invested in 2017.
Biopharma Series A investments are exploding, and
by mid-year reached $2.6 billion –compared to the
full-year total of $2.3 billion in 2017.
By indication, investor interest is driving biopharma
platform companies to levels similar to oncology,
and orphan/rare deals are making a comeback.
Underscoring robust pre-IPO biopharma valuations,
step-ups from Series A to B have seen 2x to 3x
increases in the past 18 months.
Non-invasive monitoring and imaging companies are
driving investments in Series A device companies.
While device pre-money valuations also have seen
large step-ups from Series A to B, Series D valuations
are flat or down rounds.
Investment in Dx/Tools overall is lagging in 2018,
dragged down by a large drop in DxTests deals.
On the bright side, R&D Tools saw 20 deals from the
most active investors by mid-year, representing 60%
of all dollars invested in Dx/Tools in 1H 2018.
Investments in synthetic biology building blocks,
including computational design, CRISPR editing,
DNA/RNA synthesis and organism engineering tools,
have climbed in 2017 and 2018.
These companies are revolutionizing the field
of synthetic biology with hardware and biochemical
advances in DNA/RNA synthesis.
Mid-Year 2018 Highlights: Exits
Biopharma IPOs Are Poised to Blow Past 2017 Numbers
Trends in Healthcare Investments and Exits Mid-Year 20184
75 VC-backed biopharma unicorns have reached
valuations of $1 billion or higher since 2013 –either
through acquisition or in the public markets. This year
is shaping up to be another strong year. These
biopharma exits are creating the momentum for
strong fundraising and investment.
In 1H 2018, 30 biopharma companies went public –
compared to 31 IPOs for all of 2017.
Biopharma M&A is slowing, as larger rounds and
higher valuations make early-stage M&A less
appealing.
Instead, companies looking to go public are
replenishing the biopharma IPO queue. This is fueled
by large pre-money IPO valuations driven by
continued top crossover investor activity.
Device M&A is stable, but the IPO market is favoring
neuro-focused companies, with three IPOs in 1H
2018.
PMA/De Novo pathway companies continue to
achieve better M&A values, higher multiples and
faster times to exit than 510(k) companies.
However, over the last two years, 510(k) device
values and multiples have increased.
Dx/Tools M&A activity is increasing, but these deals
have lower upfront values and longer times to exit.
There are many later-stage Dx/Tools companies that
are shaping up as acquisition candidates, with 25
still-private companies valued at $150 million or
higher.。