The nanomedicines market is worth billions and, despite a variety of hurdles, it continues to attract the attention of venture capitalists. Tarun Pandotra reviews developments in the sector.

Nanotechnology has come a long way in the last five years and now nanomedicine, a marriage of nanotechnology and medicine, is taking its place in the fight against unmet diseases. With the promise of medical applications such as targeted cancer treatments, microscopic sensors and even devices that mimic human organs in the future, enthusiasm for the field is backed by serious research and development funding from government and industry.

Despite the issues nanomedicine still faces, investment in this market is set to increase. New applications have demonstrated its value, and the resulting expansion of potential markets makes the risk more appealing.

The financial collapse, elevated costs associated with the R&D process, tricky access to funds, uncertainty over expected returns, and the lengthy FDA regulatory process have not deterred investors. Despite the problems, the potential of future developments in the different market segments, and possible high returns from high-risk innovation investments, make this market highly attractive.

The fact that in 2009 VCs doubled their investment in nanomedicine, at the expenses of the IT market, and that it continues to dominate VC funding in the healthcare market suggests it has a bright and expanding future.

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