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Home > Press > Targeted Delivery Investment at $4.1 Billion and Accelerating: Investment has recovered rapidly from the recession, but venture capital is a shrinking part of the total, says Lux Research.
Targeted delivery investments exceeded $724 million last year. This represents a 37% increase over 2009, and brings the investment market back up to the level prior to the 2008-2009 economic downturn. After peaking at $744 million in 2007, total annual transactions plunged to $424 million the following year. But funding has since seen a speedy recovery, with annual investments totaling $529 million in 2009 before reaching its current level. Although investment has renewed with a total of $4.1 billion invested in targeted delivery since 2000, the investors have changed, according to a new report from Lux Research.
"As funding has recovered, venture capitalists have contributed a smaller percentage of total investment." said Chananit Sintuu, a Lux Research Analyst and the lead author of the report. "Their share of total investment peaked at 51% in 2005, but has been in decline since, dropping to just 22% in 2010 - illustrating the importance of corporate partnerships in targeted delivery."
Other key conclusions from Lux Research's analysis include:
Venture capitalists (VCs) are not only investing less, they're investing later. Of the 13 venture investment deals in 2010, none were A/seed rounds. Four B rounds and seven C rounds went to companies like Amplyx ($1.5 million in Series B financing), and polymer nanoparticle company Cerulean Pharma ($24 million in Series C financing).
Healthcare and medicine dominate, but don't monopolize, new investment. Targeted delivery technologies aimed at healthcare and medicine applications drew a total of $3.55 billion in investment since 2004, and 259 out of 287 funding transactions. Comparatively little has been invested for uses personal care, consumer packaged goods, agriculture, and industrial application. But investors should not ignore opportunities in these markets: Consumer and packaged goods, in particular, are on track to expand use of novel delivery systems.
Device delivery technologies pose lower risk, and attract the most investment. Device delivery technologies attracted nearly $2 billion in funding from 2000 to 2010 - a marked contrast to advanced materials or biological/chemical-based targeting technologies, which drew only $465 million in investment. This balance is unlikely to change as device delivery platforms offer investors a comparatively predictable path to market.
The report, titled "Homing In on Targeted Delivery Investment Opportunities," is part of the Lux Research Targeted Delivery Intelligence service. Through analysis of 390 individual transactions dating back to 1994 and spanning 86 different targeted delivery companies, the report identifies investment trends and opportunities in five targeted delivery technology platforms: device delivery, advanced materials, bio/chemical targeting, encapsulation, and processing.
About Lux Research
Lux Research provides strategic advice and on-going intelligence for emerging technologies. Leaders in business, finance and government rely on us to help them make informed strategic decisions. Through our unique research approach focused on primary research and our extensive global network, we deliver insight, connections and competitive advantage to our clients.
For more information, please click here
Lux Research, Inc.
Carole Jacques, 617-502-5314
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