The PE Data Center Buzz
Private Company Valuations: Biotech (Q2 2008)
Posted by Justin Byers, Lead Business Intelligence Analyst on August 28, 2008
Biotechnology companies continued to be one of the most popular investments for VC firms. In Q2 2008 there were several deals that brought in more than $20 MM each. The VC Experts analyst team has reviewed a few of the top Biotech deals from Q2 2008, and the full report of the valuations and deal terms can be seen below.
Cost of Capital Benchmark
We plugged in the details of each round into our Cost of Capital Benchmark tool.
Keep in mind, the lower you are on the chart, the more company-friendly the money, the higher you go on the chart, the more investor-friendly the money. If you are a company raising money, you want be lower on the chart. This is a time when it is not best to be on top if you are the company raising money.
One of the largest deals of Q2 2008 involved Gloucester Pharmaceuticals. This company out of Cambridge, Mass., develops and makes available products for cancer treatment. The company closed on a Series C round of more than $40 MM. Some of the investors in this round were Prospect Venture Partners, ProQuest Investments, and CIBC Capital Partners.
The deal terms of this round were:
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Type of Preferred – Participating Preferred
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Capped Participation Preferred– Yes, 2x Cap
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Dividends – Non-Cumulative at a rate of 8%
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Liquidation Multiple – 1x
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Liquidation Preference – Pari Passu with other Series Preferred
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Anti-Dilution Protection – Weighted Average
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Pay-to-Play Provisions – None
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Price Per Share -
$1.44
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The total amount raised following this round was approximately
$41 MM
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VC Experts calculated a Post-Money Valuation of
$95,755,483
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Kythera Biopharmaceuticals, Inc. (formerly Aestherx, Inc.), headquartered out of Woodland Hills, California, provides medical product research and development. This company brought in an additional amount of approximately $30 MM. A few of the participants in this round were ARCH Venture Partners, Prospect Venture Partners, Versant Ventures, JAFCO Co, and Wilson Sonsini Goodrich & Rosati.
The deal terms of this round were:
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Type of Preferred – Conventional Convertible
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Dividends – Non-Cumulative at a rate of 8%
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Liquidation Multiple – 1x
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Liquidation Preference – Senior to other Series Preferred
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Anti-Dilution Protection – Weighted average
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Pay-to-Play Provisions – None
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Price Per Share -
$5.0497
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The total amount raised following this round was approximately
$30 MM
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VC Experts calculated a Post-Money Valuation of
$137,897,001
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Stromedix, Inc. is another company out of Cambridge, Mass., that raised $25 MM in a Series B round of financing. Some of the Investors in this round were Bessemer Venture Partners, New Leaf Venture Partners, and Red Abbey Venture.
The deal terms of this round were:
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Type of Preferred – Participating Preferred
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Capped Participation Preferred – No Cap
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Dividends – Non-Cumulative
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Liquidation Multiple – 1x
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Liquidation Preference – Pari Passu with other Series Preferred
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Anti-Dilution Protection – Weighted Average
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Pay-to-Play Provisions – Yes; Conversion of Preferred Stock into Common
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Price Per Share -
$1.08
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The total amount raised following this round was approximately
$25 MM
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VC Experts calculated a Post-Money Valuation of
$38,522,256
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