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A Quantitative Prioritization and Barrier Analysis of Biotechnology fields and Therapeutic areas: A Venture Capital Perspective

Abstract

Kenneth D.S. Fernald 1*, Nadine M. Janssen, and Eric Claassen

Biotechnology ventures highly depend on venture capital during early stages. Therefore, insights into investment priorities of venture capitalists can be valuable for bioentrepreneurs. This study presents a systematic prioritization analysis of venture capitalists’ investment priorities in terms of biotechnologies and therapeutic areas, as well as associated investment barriers. By means of 21 qualitative interviews and 81 quantitative questionnaires with venture capitalists, the paper shows that venture capitalists seem to be considering cell- & gene therapy technologies as future disrupters in terms of innovation and economic development. The analysis further reveals several niches of technology - therapeutic area combinations with high venture capital attractiveness, namely: protein technologies, cell therapy & gene therapy technologies for oncology, cardiovascular and central nervous system diseases. It also reveals high-prioritized investment barriers specific to these technologies and therapeutic areas, which mainly concern the complexity of the science underlying the respective technology or pathology, efficacy issues in trials, regulations, competition, and finance. Overcoming high-prioritized barriers for specific niches of technology-therapeutic area combinations could significantly increase venture capital attractiveness.

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