Fenwick Releases First National Survey of Life Science Venture Financing Environment

Mountain View, CA (May 20, 2011)— Fenwick & West LLP, one of the nation's premier law firms providing comprehensive legal services to high technology and life science clients, today introduced the results of its inaugural national Life Science Venture Capital Survey.

For the past ten years, Fenwick & West has published a widely followed quarterly survey of trends in valuations and terms of venture financings in Silicon Valley. Beginning this year, the firm is also publishing a separate survey of biopharmaceutical and medical device venture financing activity.

"We recognize that the life science industry differs in important ways from other industries covered by our Silicon Valley survey, and we intend for this separate survey to better highlight issues and trends specific to the life science industry," said Matt Rossiter, a partner in the firm and co-author of the survey.

The 2011 Survey analyzes the valuations and terms of venture financings for 338 life science companies headquartered in the United States that reported raising capital during 2011.

"For 2011, up rounds outpaced down rounds 47% to 25%. This is similar to the result we saw for Silicon Valley life science financings during 2010, but represents an improvement over 2009, which averaged 33% up rounds and 31% down rounds," said Barry Kramer, survey co-author and also a partner at the firm.

An up round is one in which the price per share at which a company sells its stock has increased since its prior financing round. Conversely, a down round is one in which the price per share has declined since a company’s prior financing round.

The Fenwick & West Life Science Venture Capital Barometer™ – which measures the change in share price of life science companies funded during the year compared with the share price of their previous financing round – showed an 14% average price increase for life science financings during 2011. Price increases were highest for companies receiving a Series B round of financing, with quarterly results for 2011 ranging from 15% to 44%.

"The overall life science venture financing environment remained challenging in 2011," noted Rossiter. "Third party reports indicate that life science venture capital investment increased in dollar terms from 2010 to 2011, but there were fewer deals completed. In addition, valuations for life science financings, as measured by our Life Science Barometer, remain below the levels seen prior to the 2008-2009 recession. However, up rounds outpaced down rounds by a healthy margin during 2011, and we observed an uptick in valuations for 4Q11, so there are reasons to believe we may see more positive trends develop during 2012."

Complete results of the survey with related discussion are posted on Fenwick & West's website at http://www.fenwick.com/vcsurvey-lifesciences.

About the Survey

The Fenwick & West Life Science Venture Capital Survey, co-authored by law firm partners Matt Rossiter, Barry Kramer and Michael Patrick, offers a unique view of the life science venture capital market by providing insight into the changes in venture capital valuations and terms. By focusing on these trends, the Fenwick & West Survey complements the data reported by other industry sources, such as Dow Jones VentureSource and the MoneyTree™ Report by PricewaterhouseCoopers and the National Venture Capital Association based on data from Thomson Reuters.

About Fenwick & West

Established in 1972, Fenwick & West LLP is one of the nation’s premier law firms with extensive expertise in venture capital, public offerings and other corporate finance, joint ventures, M&A and strategic relationships, intellectual property, litigation and dispute resolution, taxation, antitrust and employment and labor law.


Matt Rossiter
Fenwick & West LLP
Phone: 415.875.2372
Email: mrossiter@fenwick.com

Barry Kramer
Fenwick & West LLP
Phone: 650.335.7278
Email: bkramer@fenwick.com

Jennifer Shanks
Le@p! Public Relations
Phone: 408.827.8033
Email: jennifer@leappr.com