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12:00 AM
 | 
Nov 14, 2011
 |  BioCentury  |  Finance

Tipping the scale

Scale Venture Partners stops making new healthcare investments

Scale Venture Partners is the latest VC to exit healthcare, having decided it is too difficult to provide returns in the sector. The firm's discontinuation of life science investing comes on the heels of unsettling news from Prospect Venture Partners and Morgenthaler Ventures.

This year is the first since 2000 that ScaleVP has not invested in a life sciences company. From 2000-10, the firm participated in at least 32 financings totaling almost $1 billion for 17 life sciences plays.

In 2009, ScaleVP closed its third fund at $255 million. Similar to prior funds, the firm expected to invest about two-thirds in IT and one-third in healthcare.

But only two of the fund's 14 deals have been in healthcare, as the firm has grown weary of the difficulties of investing in the sector, Managing Director Kate Mitchell told BioCentury.

The firm's strategy for therapeutic developers was to focus on companies with compounds in Phase III testing that were already approved in other indications or countries. The expectation was that safety issues...

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