May 23, 2012
Life Sciences Funding Likely to Tighten
Funding for new ventures in the life sciences sector is likely to become harder to secure before it improves, says US venture capitalist Mike Carusi.
Mr Carusi, who was featured in the 2011 Forbes Midas List of top technology investors, is in Australia to attend a life sciences conference in Sydney and to look at potential opportunities in the life sciences sector here.
He is a partner at Advanced Technology Ventures, which has $US1.5 billion of funds under management, including $US500 million in the life sciences sector - mainly in companies in the very early stages of development.
Mr Carusi said funding for new ventures in life sciences had contracted as the global economy slowed, and in the US many venture capitalists were more interested in finding the "next Facebook".
"I think the dollars that flow into healthcare venture investing will continue to shrink," Mr Carusi told AAP on Wednesday.
However, firms that survived an industry shakeout arising from tighter funding could emerge stronger and become prime takeover targets for major pharmaceutical and medical device companies that were desperate for growth.
Mr Carusi said US venture capitalists were seeking opportunities in the life sciences sector overseas as they started to think globally.
He said the regulatory approval process in the US had become challenging and unpredictable as the time and cost of gaining approval for new drugs and medical devices had risen, and the number of approvals had fallen.
The regulatory process in Europe and Australia was viewed as much more predictable, and there appeared to be "less of a hang-up" over the level of efficacy of new products.
Australia was also innovative and had good doctors and hospitals that could carry out clinical trials.
But Australia perhaps was lacking the same level of entrepreneurial spirit as in the US.
"That's probably where there's a bit of a question mark," Mr Carusi said.