March 20, 2008 (Mountain View, CA) - Fenwick & West, one of the nation's premier law firms providing comprehensive legal services to technology and life science clients, today announced results of its Annual San Francisco Bay Area Life Science Venture Capital Survey.
The survey analyzed the valuations of venture financings for 97 life science companies headquartered in the greater Silicon Valley/San Francisco Bay Area that reported raising capital in calendar year 2007.
"The results show a healthy increase in venture valuations and continuation of the positive trends we've seen in the life science venture environment," said Barry Kramer, partner in the firm and co-author of the survey.
"Up rounds outpaced down rounds 79% to 12%, with 9% flat," he said. "These results were similar to 2006 and an improvement over 2005 and 2004."
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 Barometer™ – which measures the average price increase for life science companies receiving venture capital in 2007 compared to such companies' prior financing round – was up 45%.
"This was a slight reduction from 2006, a slight increase over 2005, and a significant increase over 2004," said Michael Patrick, survey co-author and also a partner in the firm.
"Compared to non-life science companies, the 45% increase in life science companies in 2007 was less than the 79% increase for non-life science companies," said Patrick, "but non-life science companies benefited significantly from high valuation investments in clean tech, Web 2.0 and wireless companies."
As reported by Dow Jones VentureSource, venture capital investment in U.S. health care companies was up 17% in 2007 with both the biopharma and medical device segments of the industry showing significant investment increases.
Complete survey results are posted on Fenwick & West's website.
The Fenwick & West Annual Bay Area Life Science Venture Capital Survey, launched by law firm partners Barry J. Kramer and Michael J. Patrick in 2004, offers a unique view of the venture capital market in the greater Silicon Valley/San Francisco Bay Area by providing insight into the changes in venture capital valuations. Focusing exclusively on trends in venture financing and valuations, the Fenwick & West Life Science Survey complements the economic data presented in the Dow Jones VentureSource Survey and the MoneyTree™ Survey by PricewaterhouseCoopers, Thomson Venture Economics and the National Venture Capital Association.
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.