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Market Research Report

Strategic Trends in Private Equity and Venture Capital Funding for Healthcare

Published by CBR Pharma Insights Product code 406642
Published Content info 78 Pages
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Strategic Trends in Private Equity and Venture Capital Funding for Healthcare
Published: November 1, 2016 Content info: 78 Pages
Description

Private Equity is a term used to refer to money invested in private companies, and those companies become private through investment. However, in the financial industry the term is used to refer to firms that buy companies through leveraged buyouts (LBO) - the acquisition of another company using a significant amount of borrowed money to meet the cost of acquisition (Agres, 2005).

More specifically, Private Equity companies take existing companies with existing products and existing cash flows, and restructure them in order to enhance the financial performance. Success for PE investors lies in generating higher returns by pursuing opportunities with target companies that have significant growth potential, by adding value to the company while it is owned, and by executing a successful exit strategy.

PE and VC funds have been important participants in a wide range of industries for many decades. This is particularly true in the healthcare industry and, although to a much lesser extent than previously, they remain one of the few sources of funding for start-up companies, which can that often bring disruptive and life-saving medical interventions and technologies to the marketplace (NVCA, 2016a).

In 2007, the total value of completed global healthcare Private Equity deals was USD 66.2Billion. This plummeted by 81% to USD 12.6Billion in 2008. In 2010, the market showed signs of recovery when deal values reached an aggregate of USD 33.9Billion, an increase of 170.3% from 2008. However, recent years have witnessed a steady decline, with 2015 and 2014 being the exception. Deal values exhibited a negative compound annual growth rate (CAGR) of 11.8% from 2010 to 2015, with 2015 recording a total of USD 18.1Billion. Despite the recent uptick, 2015 values were nowhere near pre-crash levels. For example, PE deal values recorded totals of USD 53.6Billion and USD 66.2Billion in 2006 and 2007, respectively.

In terms of deal volume, North America and Europe continue to be the main focus for Private Equity investments in healthcare. The North American region has witnessed a decline in deal activity in recent years, however. From 2010 to 2015, the deal activity in the region exhibited a negative CAGR of 4.1%.

The report "Strategic Trends in Private Equity and Venture Capital Funding for Healthcare" provides a comprehensive analysis on emerging investment trends within the healthcare industry. Private equity (PE) and venture capital (VC) funds have been important participants in a wide range of industries for many decades - particularly the healthcare industry.

In depth, it provides the following:

  • Provides in-depth qualitative and quantitative analyses of global and regional trends that have shaped the current healthcare PE and VC landscape, particularly from 2006 to 2015.
  • Analyses of key investment indicators in the US, including levels of fundraising activities by PE and VC companies, VC investments by industry sector, and VC-backed exits and venture financing trends - particularly for early-stage healthcare companies.
  • Identifies the top private equity and venture capital deals in 2015 and concludes with a discussion of new funding and investment models emerging in the healthcare industry.
  • Includes forecasts for the outlook for PE and VC firms investing in the healthcare sector. VC investment in early-stage healthcare companies continues to decline, and has almost completely disappeared in certain countries.

Companies mentioned in this report: Axovant Sciences, NantKwest, Adaptimmune Therapeutics, Spark Therapeutics, Aimmune Therapeutics, Blueprint Medicines, RegenxBio, ProNAi Therapeutics, Seres Therapeutics, Global Blood Therapeutics.

Table of Contents
Product Code: GBI073CBR

Table of Contents

1. Table of Contents

  • 1.1. List of Tables
  • 1.2. List of Figures

2. Introduction

  • 2.1. Overview of Private Equity and Venture Capital
    • 2.1.1. Private Equity and Venture Capital: Similarities and Differences
    • 2.1.2. The Importance of Adequate Fundraising for PE and VC firms
  • 2.2. The Significance of Private Equity and Venture Capital in the Healthcare Industry
    • 2.2.1. The Venture-Backed Healthcare Innovation Model
    • 2.2.2. Critical Factors to Consider when Selecting a Venture Capital Firm
    • 2.2.3. What Are the Types of Private Equity Firms Operating in the Healthcare Industry?

3. Global Trends in Private Equity and Venture Capital Investments in the Healthcare Industry

  • 3.1. Is R&D Productivity in Healthcare Still Declining?
  • 3.2. What is Causing the Increase in the Cost of Bringing Medical Interventions to Market?
  • 3.3. Global Healthcare Private Equity Deal Trends: Volume and Value, 2006-2015
  • 3.4. Regional Healthcare Private Equity Deal Trends: Volume and Value, 2006-2015
  • 3.5. Which Therapy Areas Are Receiving Noteworthy Private Equity Investment?
  • 3.6. Top 10. Healthcare Private Equity Deals, 2015
  • 3.7. Top 10. Healthcare Venture Capital Deals, 2015
  • 3.8. Are New Companies in the Healthcare Industry Living in a Post-VC Era?
  • 3.9. What are the Risks if Investments in the Healthcare Industry Decrease Significantly?
  • 3.10. New Funding and Investment Models Emerging in the Healthcare Industry
    • 3.10.1. The Role of Crowdfunding in Early-Stage Healthcare in the Post-VC Era

4. US Private Equity and Venture Capital Industry Dynamics

  • 4.1. Immediate Aftermath of the 2008 Global Financial Crisis on the Value of Capital Commitments to Private Funds in the US
  • 4.2. Venture Capital Fundraising Trends in the US: Volume and Value of Funds, 2006-2015
  • 4.3. US Venture Capital Investment Trends
  • 4.4. Is Biotechnology Still Playing Second Fiddle to the Software Sector?
  • 4.5. Trends in Seed Stage VC Financing in the US by Volume and Value, 2015
  • 4.6. US Venture-Backed Exits, Volume and Value, 2006-2015
  • 4.7. US Venture-Backed Healthcare Acquisitions 2006-2015

5. Equity Offerings in the Healthcare Sector, Value and Volume, 2006-2015

  • 5.1. US Venture-Backed Initial Public Offerings in Healthcare, 2006-2015
  • 5.2. Company Profiles and Initial Public Offer Details
    • 5.2.1. Axovant Sciences (Stock Symbol: AXON)
    • 5.2.2. NantKwest (Stock Symbol: NK)
    • 5.2.3. Adaptimmune Therapeutics (Stock Symbol: ADAP)
    • 5.2.4. Spark Therapeutics (Stock Symbol: ONCE)
    • 5.2.5. Aimmune Therapeutics (Stock Symbol: AIMT)
    • 5.2.6. Blueprint Medicines (Stock Symbol: BPMC)
    • 5.2.7. RegenxBio (Stock Symbol: RGNX)
    • 5.2.8. ProNAi Therapeutics (Stock Symbol: DNAI)
    • 5.2.9. Seres Therapeutics (Stock Symbol: MCRB)
    • 5.2.10. Global Blood Therapeutics (Stock Symbol: GBT)

6. Private Equity Firms, Company Drill-Downs

  • 6.1. TPG Capital
    • 6.1.1. Overview and Portfolio Management
    • 6.1.2. TPG Capital, Historical Healthcare Deal Trends
  • 6.2. The Carlyle Group
    • 6.2.1. Overview and Portfolio Management
    • 6.2.2. The Carlyle Group, Historical Healthcare Deal Trends
  • 6.3. Apax Partners
    • 6.3.1. Overview and Portfolio Management
    • 6.3.2. Apax Partners, Historical Healthcare Deal Trends
  • 6.4. KKR & Co
    • 6.4.1. Overview and Portfolio Management
    • 6.4.2. KKR & Co, Historical Healthcare Deal Trends
  • 6.5. Warburg Pincus
    • 6.5.1. Overview and Portfolio Management
    • 6.5.2. Warburg Pincus, Historical Healthcare Deal Trends
  • 6.6. Bain Capital Private Equity
    • 6.6.1. Overview and Portfolio Management
    • 6.6.2. Bain Private, Historical Healthcare Deal Trends

7. Venture Capital Firms, Company Drill-Downs

  • 7.1. New Enterprise Associates
    • 7.1.1. Overview and Portfolio Management
    • 7.1.2. New Enterprise Associates, Historical Healthcare Deal Trends
  • 7.2. OrbiMed Advisors
    • 7.2.1. Overview and Portfolio Management
    • 7.2.2. OrbiMed Advisors, Historical Healthcare Investment Trends
  • 7.3. Kleiner Perkins Caufield & Byers
    • 7.3.1. Overview and Portfolio Management
    • 7.3.2. Kleiner Perkins Caufield & Byers, Historical Healthcare Investment Trends
  • 7.4. Flagship Ventures
    • 7.4.1. Overview and Portfolio Management
    • 7.4.2. Flagship Ventures, Historical Healthcare Investment Trends
  • 7.5. Third Rock Ventures
    • 7.5.1. Overview and Portfolio Management
    • 7.5.2. Third Rock Ventures, Historical Healthcare Investment Trends
  • 7.6. Versant Ventures
    • 7.6.1. Overview and Portfolio Management
    • 7.6.2. Versant Ventures, Historical Healthcare Investment Trends

8. Future Outlook

  • 8.1. What Factors will Drive Investment in Healthcare Industry in Coming Years?
  • 8.2. Will New Financing Models Provide Sustainable Growth for Early-Stage Healthcare Companies?
  • 8.3. Which Geographical Markets will Drive Investment in Healthcare in Foreseeable Future?
  • 8.4. How will Venture Capital Firms React to Increasing Competition in Healthcare Sector?

9. Conclusions

10. Bibliography

11. Appendix

  • 11.1. Global Healthcare Private Equity Deal Trend (Volume and Value), 2006-2015
  • 11.2. Global Healthcare Private Equity Trends by Region, Volume, 2006-2015
  • 11.3. Global Healthcare Private Equity Trends by Region, Value ($bn), 2006-2015
  • 11.4. Global Healthcare Private Equity Deal Value by Therapy Area ($m), 2014 and 2015
  • 11.5. US Capital Commitments to Private Equity Firms ($bn), 2006-2015
  • 11.6. US Venture Capital Fundraising, Volume and Value, 2006-2015
  • 11.7. US Venture Capital Investment Trends, Volume and Value, 2006-2015
  • 11.8. Composition of Venture Capital Investments in the US by Sector, 2015
  • 11.9. Value of Venture Capital Investment in the US by Company Stage of Development, 2015
  • 11.10. Volume of Venture Capital Investment in the US by Company Stage of Development, 2015
  • 11.11. Venture-Backed Initial Public Offerings and Merger and Acquisition Exits, Volume, 2006-2015
  • 11.12. Venture-Backed Initial Public Offerings and Merger and Acquisition Exits, Value ($bn), 2006-2015
  • 11.13. US Venture-Backed Acquisitions, Total Transaction Value ($bn), 2006-2015
  • 11.14. Equity Offerings in the Healthcare Sector, Value and Volume, 2006-2015
  • 11.15. US Venture-Backed IPOs, Healthcare and Total, 2006-2015
  • 11.16. Contact Us
  • 11.17. Disclaimer
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