Financing Finds Its Footing
STACY LAWRENCE
A hint of optimism is starting to tinge a financing climate that, until recently, was clouded with uncertainty. After a dry spell that started in 2000, the initial public offering market is finally starting to revive. The first life sciences firm to debut this year, Molina Healthcare, was met with ample enthusiasm. The managed care company priced close to the top of its filing range of $16 to $18 and saw a considerable lift in the two months following its IPO in July. This life sciences launch into the markets may not be an anomaly: in August, the generic-antibiotic firm Advancis Pharmaceutical filed to go public.
Mergers and acquisitions among life sciences companies are also showing some signs of revival. A sizable deal was announced in July by Swiss pharmaceutical firm Roche, which said it would acquire IGEN International, a molecular diagnostics company.
Venture capital markets generally lag public markets by as much as a year, but investors already seem to be responding to the cautiously confident mood. VC funding and fund-raising both increased in the second quarter, the first time in 12 consecutive quarters that total funding increased. And the two-year-old trend of releasing limited partners from their commitments to VC firms waned as fund-raising grew slightly.
The life sciences continue to claim about a quarter of VC dollars. One-half to two-thirds of that money is going to biotech companies, which have been faring better than medical device firms, although device companies, too, have seen some increased funding of late. Health care services firms, however, seem to have completely fallen off the VC map and are receiving ever-dwindling sums.
Venture capital investors are sitting on an estimated $80 billion in uninvested reserves; that�s equal to the total amount of money invested from the dot-com boom, starting in 1998, to the present.

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Additional charts accompanying text include:
Life Sciences Global M&A Announcements
VC Funding to Life Sciences Sectors
VC Funds Raised and Commitments Waived
Early Stage as a Percentage of Venture Capital
Notable Life Sciences Deals
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