VC firm pulls plug on healthcare investing.

For some time now, we’ve been hearing about how generalist VC firms are cutting back on new life sciences investments, particularly in capital-intensive areas like pharmaceuticals and devices. Now we have the first VC firm (to my knowledge) that is explicitly shutting down its healthcare investment practice without doing some sort of spinout (as both Morgenthaler Ventures and Advanced Technology Ventures did last week).

The firm is Scale Venture Partners, an expansion-stage investor that began life 16 years ago as Bank of America’s in-house venture group. Two of its four founders at the time were life sciences pros, and the firm invested in 30 healthcare companies (mostly in the therapeutics space). But various pressures – namely regulatory unpredictability and corresponding costs – have convinced Scale to scrap any future healthcare deals, although it will do follow-ons for existing portfolio companies. The two co-founding partners – Mark Brooks and Lou Bock — will stick around to manage the portfolio, but junior healthcare staffers like principal Jeff Calcagno have left.

Scale’s Kate Mitchell tells me that the decision was difficult, but necessary. “Our portfolio has had seven NDA submissions since 2008, with five approved and two still pending. That should be a success, except it has taken twice as long to get there as it used to five or six years ago. The math with the FDA just doesn’t work anymore for us in terms of a venture fund lifecycle… It’s incredibly frustrating to watch this happen, particularly to people like Mark and Lou who have really good investing acumen.”

Except a formal statement later today from Scale, which also will announce the promotion of Stacey Curry Bishop to managing director.

Sign up for my daily email newsletter on deals and deal-makers: GetTermSheet.com