The Mercury News reported today that valuations for venture-funded life science companies in the Bay Area increased in 2006, according to a survey taken by Mountain View, CA law firm Fenwick & West.

As The Mercury News reported:

The percentage of local life-science companies that saw their per-share price increase from previous financing rounds rose to 79 percent last year, up from 65 percent the year before. . . "Down" rounds were reported by 15 percent of the companies surveyed, while no change was recorded by 6 percent.

For non-life-science ventures, 67 percent reported up rounds in 2006, while 22 percent recorded down rounds and 11 percent said there was no change.

The average price increase for life science companies receiving venture capital in 2006 compared with previous rounds was up 50 percent, with medical-device valuations increasing 55 percent on average compared with a 41 percent average increase in pharmaceutical valuations in 2006.

Non-life-science start-ups saw their average price increase by 55 percent.

This report confirm what those of us in the Bay Area already knew: the state of biotech in the Bay Area continues to be strong.