Life Science Investor Landscape: Who’s Out There, and What Are They Looking For?

29 Sep

By Lucy Parkinson, Director of Research, LSN

LSN’s research staff continue to inverview life science investors from all over the world and collect in depth information on each investor’s unique parameters and focus areas. In this article, we’ll take a quick overview of the current landscape.  All these charts are based on a sample of investors that have been interviewed by LSN Research in 2016.

Firstly, what type of investors are currently looking into life science and health innovation deals?  While venture capital and private equity remain a significant source of startup funds, we also speak with many major corporations in healthcare and their corporate VC arms, in addition to private and family office investors, angels, foundations, and others. A successful fundraise may involve speaking with investors from all of these groups.

LSN focuses on four main verticals within health innovation; therapeutics, medical devices, diagnostics and healthcare IT. Many firms invest in more than one of these sectors; others have a specific lens on only one sector. Among the investors LSN has spoken with recently, medical technology and diagnostics are the most popular sectors. These products can attract interest both from traditional life science investors and from newer players in the sector, including major technology firms that are increasingly taking an interest in healthcare innovation.

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Many investors are particular about what stage of development a lead asset must have reached before they’re willing to make an investment.  LSN finds that most often, the biotech investors we speak to are looking for preclinical-stage or Phase I assets, with many also open to considering assets at Phase II or later. Given the need for funding at these crucial early stages of product development, our bias is to uncover investors that are willing to stake their money at or soon after the IND.

In medtech and diagnostics, it’s a somewhat different story due to the much compressed development timeline of these products as compared with therapeutics. We find the greatest amount of interest in devices and diagnostic tests that are in clinical trials. While there are many investors out there that will make medtech investments prior to entering the clinic, slightly more are interested in marketed products that need capital for commercialization and growth.

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Where are these investors looking for deals?  About a third of those we speak with are open to life science opportunities anywhere in the world. Others are focused on one or more regions; the major life science investment regions are shown below.

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If you’re looking for capital and need to prepare for a fundraising roadshow, LSN’s curated information on what investors want to see and how to contact them could help you to map out your campaign. If you’d like to take a closer look at the investors that are looking for new technologies in your sector, you can reach out to info@lifesciencenation.com for a demo.

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