Venture capital investment in American life-sciences innovation is suffering an alarming decline. The number of new biotechnology and medical device companies receiving start-up financing has now fallen to the lowest levels in 18 years, according to PriceWaterhouseCoopers. In recent decades, the cost of developing a single new medicine has grown more than 10-fold, to $1.5 billion. On average, each new drug spends 15 years in development. And only two in 10 successfully commercialized medicines ever earn a return on investment. Start-ups have played a vital role in the development of an entire generation of cutting-edge new therapies that have revolutionized...