Midwest health care startups raise record
$1.2 billion in 2007
Minnesota and Ohio attract most dollars
Midwest health care startups attracted a record $1.2 billion in new investments in 2007, according to the Midwest Health Care Venture Investment Report released by BioEnterprise, a BioOhio regional affiliate. The total represents a 55% increaseover 2006, a sharp rise that both outpaces national venture industry growth and even surpasses the 25% increase that occurred in the previous year.
“The rise of Midwest health care ventures has accelerated in an almost exponential manner,” said Baiju R. Shah, president of BioEnterprise. “The pipeline of high-quality ventures continues to both mature and gain greater national venture interest.”
Ohio and Minnesota led all Midwest states—companies in both states attracted $296 million. Both states had one major financing (Athersys, Ohio, $70 million; CVRx, Minnesota, $65 million) and several other financings exceeding $20 million each. Ohio reported 44 transactions, compared to 29 for Minnesota. Following the leaders were Indiana ($135.6 million), Illinois ($125.5 million), and Western Pennsylvania ($101.4 million).
By sector, the equity funding was allocated as follows:
- Biopharmaceutical companies: $687 million (56%)
- Medical device companies: $329 million (27%)
- Health care software and service companies: $208 million (17%)
Ohio’s 2007 health care and bioscience investments represent a 160% increase compared to 2006, which included 39 deals totaling $113.9 million.
In terms of metro areas, Minneapolis ($296 million) and Cleveland ($241.8 million) led the way, collectively accounting for 44 percent of Midwest health care and bioscience investment. Those regions were followed by Chicago ($125.5 million), Indianapolis ($113.6 million) and Pittsburgh ($101.4 million).
The year saw several high-profile public biopharmaceutical offerings including Eurand (Ohio), Athersys (Ohio), and Targanta (Indiana). Other notable public offerings in the Midwest included Enteromedics (Minnesota) and Tomotherapy (Wisconsin). In addition, several companies achieved success through acquisitions such as Renal Solutions (Pittsburgh) and MemberHealth (Ohio).
“These data reflect the increasing quality and quantity of good investment opportunities we investors are seeing here in the Midwest,” commented John Rice, managing partner of
Triathlon Medical Ventures, which has offices in Cincinnati, Indianapolis, St. Louis, and Louisville. “This is the result of the continued investments being made by many of the states in this region promoting the life sciences.”
The Midwest Health Care Venture Investment Report aggregates venture investment in 10 Midwest states and western Pennsylvania and includes all reported numbers. For complete state-by-state and region-by-region results across the Midwest, access the full report here