PRINT THIS PAGE Midwest Health Care Startups Raise $564 Million Through Q3 2006
22/03/2007. Source:BioEnterprise.
Investments Up 36% From 2005; Minnesota, Illinois, and Ohio Lead States Midwest health care startups reported $564 million in total investments through the first three quarters of 2006, according to the Midwest Health Care Venture Investment Report released by BioEnterprise. The total represents a 36 percent increase over the like period in 2005, a significant increase that outpaces national industry growth.
Minnesota, the Midwest’s traditional leader in health care ventures, led all states with 18 startups attracting $181.8 million in investments so far this year. Three Minnesota companies posted the quarter’s largest Midwest financing rounds: Enteromedics, which raised $45 million, Cardiovascular Systems, $25 million, and Anulex, $20 million. Following Minnesota was Illinois with $101.6 million in six companies (though Illinois companies reported no new investment this past quarter), and Ohio with $67.8 million across 19 companies.
The report aggregates venture investment in 10 Midwest states and Western Pennsylvania. Following the leaders are Kentucky ($51.4 million), Western Pennsylvania ($46.4 million), Missouri ($39.2 million), and Michigan ($38.9 million). Also reporting financings were Indiana ($25.6 million) and Wisconsin ($11.5 million). States with no reported financings included Iowa, Kansas, and West Virginia. In terms of Midwest regions, Minneapolis-St. Paul and Chicago led the region, followed by Cleveland and Pittsburgh.
“This quarter saw a significant number of large and small financings across the Midwest, increasing the number of existing, equity-financed companies throughout the geography,” said Baiju R. Shah, President of BioEnterprise.
By sector, the equity funding was allocated as follows:
Biopharmaceutical companies: $254 million (45 percent) in 43 companies
Medical device companies: $225 million (40 percent) in 45 companies
Health care software and service companies: $85 million (15 percent) in 28 companies.
“Several Midwest companies completed successful public offerings including QuatRx (Michigan) and Cleveland BioLabs (Ohio), and several enjoyed successful strategic exits such as MinuteClinic (Minnesota, acquired by CVS) and Suros Surgical (Indiana, acquired by Hologic),” said Shah.
“In addition to equity financing, a number of Midwest companies are the recipients of significant State funds from programs designed to grow regional life science companies,” Shah added. “For example, Michigan’s $2 billion 21st Century Jobs Fund and Ohio’s $1.6 billion Third Frontier Program have each awarded more than $30 million in 2006 to support bioscience start-ups and commercialization; the breadth and magnitude of these Midwest initiatives has not yet been recognized nationally where attention continues to focus on similar coastal programs that are still at earlier stages of development or just discussion.”
“With all of the deal activity across the spectrum of financing, it is no wonder that the Midwest health care community is experiencing increased interest from coastal investors and investment banks.”
The Midwest Health Care Venture Investment Report includes all reported numbers. For complete state-by-state results across the Midwest, see the attached table.
Additional data about Health Care business activity in the Midwest can be viewed at http://www.bioenterprise.com/reports/index.html.
Table: Midwest Health Care Venture Investment (By State)
Table: Midwest Health Care Venture Investment (By Region)
Sources: Compiled by BioEnterprise team from Venture Wire, Private Equity Week, Wall Street Journal, Venture Source, SEC Filings, company press releases, and www.biospace.com.
About BioEnterprise
BioEnterprise is a business formation, recruitment, and acceleration effort designed to support the growth of bioscience companies. Located in Cleveland, BioEnterprise provides management counsel and support services to health care companies. BioEnterprise's partners are Case Western Reserve University, The Cleveland Clinic Foundation, University Hospitals Health System, and Summa Health System. Additional technology partners include the NASA Glenn Research Center, Cleveland State University, NorTech, and Omeris.
The BioEnterprise Initiative comprises the collaborative activities of BioEnterprise Corporation, Case Research Institute Office of Technology Transfer, Cleveland Clinic Innovations, and Summa Enterprise Group. The combined efforts of these groups has created, recruited, and accelerated more than 50 companies in four years.
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