Midwest investments in health care companies soar

Midwest health care companies attracted $1.8 billion in new investments across 243 companies in 2014, according to the BioEnterprise Midwest Healthcare Growth Capital Report.

The totals are the highest recorded in both dollars and number of companies funded since BioEnterprise began compiling the report in 2005, surpassing the banner 2007 by 46 percent and 2013 by 135 percent.

Ohio ($499 million) and Minnesota ($406 million) led Midwestern states in attracting investment dollars. In both states and regions the number of companies receiving funding decreased.

Wisconsin attracted health care venture investments of $187.4 million for 27 companies in 2014, up from $16.8 million for seven companies in 2013. The largest reported Midwest deal occurred in Wisconsin, where Shine Medical Technologies, a biotech company, raised $125 million. The Wisconsin numbers were tracked by the Wisconsin Technology Council.

“The significant increase in Midwest health care growth funding mirrors the national trend, as does the decrease in the number of early stage companies receiving funding in certain Midwest states and regions. The deals are getting bigger and this signifies a maturing of the Midwest healthcare innovation ecosystem,” said Aram Nerpouni, president and chief executive officer of Cleveland, Ohio-based BioEnterprise.

“Interestingly, several Midwest states and regions, such as Illinois and Wisconsin, experienced large increases in both funds attracted and companies funded,” Nerpouni said. “All in all there is a robust pipeline of attractive health care companies in all stages building rapidly in the Midwest.”

By sector, the 2014 growth capital funding was allocated as follows:
• Biopharmaceutical companies: $629 million (35 percent).
• Medical device companies: $593 million (33 percent).
• Health care IT and service companies: $562 million (32 percent).

“As with the national trend, the largest sector growth in the Midwest occurred in health care IT and services,” Nerpouni said. “In 2013, the HIT and services sector comprised only 16 percent of the total funding, doubling to 32 percent in 2014.”

To view additional data about Midwest health care business activity visit http://www.bioenterprise.com/reports.

Tom Still, president of the Wisconsin Technology Council, will provide an update on the state’s technology economy at the Northern Trust Economic Trends Breakfast to be presented by BizTimes on Thursday, Jan. 29. To register to attend, visit www.biztimes.com/trends.

 

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