Proposed Regulatory Uniformity to Boost Venture Capital Investments in Healthcare Arena, Says Frost & Sullivan
Venture capital funding to focus on enhanced drug delivery and product life cycle management technologies
LONDON, Jan. 23, 2013 /PRNewswire/ -- In a shaky economic climate, where fund raising has become tight and there are decreasing opportunities to exit the market, venture capital (VC) firms have become extremely cautious in choosing their investments. This has led to the trend of low value deals. However, segments like healthcare equipment have got sizeable injections of new funding, with such positive trends set to continue.
New analysis from Frost & Sullivan (http://www.financialservices.frost.com), Analysis of Venture Capital Investment Trends in the European Healthcare Industry, notes that drug delivering technologies and those focusing on product life cycle management of existing drugs are expected to attract VC investments.
"Patent expiration and lengthy approval times have increased the costs of drug development," says Frost & Sullivan Financial Analyst Dr. E. Saneesh. "This, coupled with a slowing economy, has made VC investors reluctant to invest more in new drug development. Instead, they have focused on enhanced drug delivery technologies and product life cycle management technologies."
While investments in pharmaceuticals and biotechnology decreased from 2010 to March 2012, healthcare equipment displayed sustained investments.
"Healthcare equipment is attracting VC investments because the innovations in this segment reduce the healthcare delivery costs, making the delivery easier," explains Dr. Saneesh. "Shorter product development cycles result in faster returns and, moreover, product approvals here are not as complex as those required for drugs."
However, regulatory variations across countries present a barrier for companies wanting to access VC funding. This has also affected fund raising efforts by VC firms.
Another concern is that the high costs and extended approval times related to drug development have decreased the chances of an early exit for VCs expecting a faster return on their investments.
"With the doors of IPO almost shut for them, VCs are now looking at new routes for exit," states Dr. Saneesh. "With the increase of strategic investments and corporate venturing in pharmaceuticals and biotechnology segments, mergers and acquisitions and strategic buyouts have become attractive exit options."
Technologies which reduce healthcare costs and enable safer and faster healthcare delivery are set to attract VC investments. New taxation laws and proposals to establish uniform EU-wide regulations for VC funds will further boost confidence levels.
If you are interested in more information on this study, please send an email with your contact details to Anna Zanchi, Corporate Communications, at firstname.lastname@example.org
Analysis of Venture Capital Investment Trends in the European Healthcare Industry is part of the Financial Benchmarking in the Business and Financial Services Industry subscription, which also includes research services in the following markets: Venture Capital Investment Trends in Financial Services industry, Aerospace and Defense Industry, Automotive Industry. All research services included in subscriptions provide detailed market opportunities and industry trends that have been evaluated following extensive interviews with market participants.
Frost & Sullivan's Business and Financial Services group serves clients around the world in all aspects of financial analysis, market research and monitoring, due diligence, idea generation, opportunity analysis, investment valuation, and other proprietary research.
About Frost & Sullivan
Frost & Sullivan, the Growth Partnership Company, works in collaboration with clients to leverage visionary innovation that addresses the global challenges and related growth opportunities that will make or break today's market participants.
Our "Growth Partnership" supports clients by addressing these opportunities and incorporating two key elements driving visionary innovation: The Integrated Value Proposition and The Partnership Infrastructure.
- The Integrated Value Proposition provides support to our clients throughout all phases of their journey to visionary innovation including: research, analysis, strategy, vision, innovation and implementation.
- The Partnership Infrastructure is entirely unique as it constructs the foundation upon which visionary innovation becomes possible. This includes our 360 degree research, comprehensive industry coverage, career best practices as well as our global footprint of more than 40 offices.
For more than 50 years, we have been developing growth strategies for the global 1000, emerging businesses, the public sector and the investment community. Is your organisation prepared for the next profound wave of industry convergence, disruptive technologies, increasing competitive intensity, Mega Trends, breakthrough best practices, changing customer dynamics and emerging economies?
SOURCE Frost & Sullivan
More by this Source
ICT to be a catalyst for transformation to drive connected industries
Dec 06, 2013, 02:04 ET
Browse our custom packages or build your own to meet your unique communications needs.
Learn about PR Newswire services
Request more information about PR Newswire products and services or call us at (888) 776-0942.