Biotech Industry Set to Increase Its Attraction as a Major Destination for Private Equity, According to the Latest Research from AltAssets.

Business Editors

Strong medium-term prospects for the biotech industry are underpinning unprecedented private equity and venture capital interest in the sector and promise to attract more institutional investors in the short-term, according to the latest research from AltAssets, "Delivering on Discovery - Private Equity Investing in Biotechnology".

The report predicts further growth in the number of private equity participants in the market but says it will not be accompanied by the sort of loss of investment discipline experienced in other previously 'hot' venture sectors.

The research findings represent a strong endorsement of the biotechnology sector. There are short-term barriers - not least the present state of public markets - but the long-term drivers of the industry are fundamentally sound, and guarantee strong demand for biotech investment.

- There is not a biotech venture bubble and the sector will continue to provide a wealth of attractive investment opportunities. The sector has been historically under-funded and can now productively absorb the increased venture capital and private equity inflows. Equally, the advances in science are resulting in a huge increase in deal flow.

- The most successful biotech venture capital firms will be the ones that have US expertise and greater specialist knowledge. Deep relationships within the pharmaceutical and biotech industry will be significant competitive differentiators.

- The number of private equity firms operating significantly in the biotech sector will increase in the short term to 350 but less capable firms will retreat within the next two years. Many of the new entrants are former pharma and biotech execs with high levels of industry expertise. The significant number of less specialised firms, however, will retreat from the sector as they become aware of the demands of biotech investing. No great fallout will occur, however, as only a small number of truly non-viable firms will raise capital in the first place.

- Sophisticated biotech companies are finding it easier to raise money from venture capitalists. Key characteristics for successful financing include definite commercial application, security of patent-protected concepts and effective management.

"Biotech has traditionally been an important niche sector for private equity investment, but the industry's increasingly bright commercial prospects are pushing it firmly into the venture capital mainstream. The current dismal state of public markets, however, stands as a stark warning of how important it is for investors to have genuine scientific expertise coupled with proven venture experience," said Chris Davison, Head of Research at AltAssets.

The report is available at www.AltAssets.net or call [phone].

Notes to editors:

AltAssets is a division of Almeida Capital Ltd. The Chairman of Almeida Capital is Mitch Cybulski, who was formerly Chairman of SmithKline Beecham International.

The report includes a directory of more than 600 private equity investors in biotechnology, of whom around 300 were identified as significant investors.

AltAssets is an independent network for organisations with an interest in venture capital and private equity market. It provides institutional investors and other industry participants with proprietary research, comprehensive online news and information and an online library of material aggregated from the world's leading private equity experts. Join the network and receive further research by visiting www.AltAssets.net