Ebb & Flow

With two months of the year already gone, the trends are saying that the IPO window is helping to open venture purse strings. In the U.S., private companies raised $641 million to the end of February, beating the $470 million raised in the first two months of 2002, which was the previous best start of the last five years.

Helping matters is the widening valuation gap between public tech and biotech plays. Last week, the BioCentury 100 added 5.6%, putting the index up 13.3% on the year. By comparison the NASDAQ Composite added only 0.9% last week and is now up just 2.2% in 2004. The BioCentury London Index is up 9% on the year, after a 3.8% gain last week.

Despite London's updraft, the pace of VC activity in Europe is more languid. To the end of last month, VCs had invested $164 million in biotech. Although it is up considerably on the $53 million raised in the first two months of last year, this year's tally is way off the $206 million raised in the 2002 period (see "U.S. vs EU Venture").

The average amount raised per investment is $18.8 million in the U.S. and $14.9 million in Europe, a difference of $3.9 million per round - better than last year's $10.4 million gap. In the benchmark 2002 year, the average raised per round in the first two months was $13.8 million in the U.S. and $13.7 million in Europe.

Not all is tough in Europe. At the end of February, two companies raised $66.4 million between them. U.K. preclinical company Domantis raised £17.5 million ($33 million) in a series B round and Austria's igeneon raised E26.7 million ($33.4 million) in a series C round (see Ebb & Flow, March 1).

Both companies attracted money from the U.S., which is a fairly new phenomenon, especially for a company like Domantis with no products in the clinic. Domantis is focused on inflammatory diseases and oncology, while igeneon's IGN101 cancer vaccine is in Phase III trials for breast, colorectal and non-small cell lung cancer (NSCLC).

According to Domantis CEO Robert Connelly, the draw for investors has been the company's ability

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