In this study, we examined the in vivo pharmacological effects of the sequential delivery of dexamethasone (DX) followed by vascular endothelial growth factor (VEGF) on the immune response and localized vascular network formation around a hydrogel-coated, micro-capillary implant for single walled carbon nanotube (SWNT) based fluorescence sensors. We demonstrate, for the first time, imaging of a SWNT near infrared fluorescent device implanted subcutaneously in a rat model. For tissue response studies, the chick embryo chorioallantoic membrane (CAM) was used as a tissue-model for an 8-day implantation period. The average vascular density of the tissue surrounding a micro-dialysis capillary sensor was evaluated for various types of surface coatings of the capillary designed to minimize protein adsorption and deliver therapeutics designed to reduce inflammation and promote vascularization. A PEG hydrogel loaded either with DX and VEGF for simultaneous delivery, resulted in an average of 1.24±0.35 x 10-3 vessels / μm2 after the 8 day incubation. VEGF alone with a bolus addition of DX, for sequential delivery, resulted in a comparable 1.15±0.30 x 10-3 vessels / μm2. The control where no therapeutics were utilized resulted in 0.71±0.20 x 10-3 vessels / μm2. We introduce the concept of a therapeutic index for implantable sensors defined as the ratio of average vasculature density to average inflammatory cell density from histological analyses. This index reflects the promotion of angiogenesis versus the host immune response. The result was that the index for sequential DX/VEGF delivery was 60.3% and 139.3% higher than that of VEGF and DX release alone, respectively, and was also 32.1 % higher when compared to simultaneous administration, proving to be a more effective strategy in utilizing the pharmacological impact of DX and VEGF around the biosensor-model implant.