Midwest Healthcare Startups Raise $777 Million in First Half of 2014

Minnesota, Ohio and Michigan Lead States

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Jul 28, 2014, 09:05 ET

CLEVELAND, July 28, 2014 /PRNewswire-USNewswire/ -- Midwest healthcare startups reported $777 million in total investments across 139 companies in the first half of 2014, according to the BioEnterprise Midwest Healthcare Venture Investment Report. The totals are the highest recorded for the region both in dollars of financing and number of companies funded since BioEnterprise began compiling the report in 2005. Minnesota led the way in total financings ($184 million), followed by Ohio ($155 million) and Michigan ($114 million). Among regions, Minneapolis, Detroit-Ann Arbor and Cleveland were the leading areas for healthcare investment in the Midwest.

"It's been a banner first half for Midwest healthcare startups," said Aram Nerpouni, President & CEO of BioEnterprise. "Investment activity continued its upward trend and the company pipeline once again attracted broad investor interest with a record number of companies receiving funding."

By sector, the equity funding was as follows:

Medical device companies: $342 million (44%)
Biopharmaceutical companies: $240 million (31%)
Healthcare software and service companies: $196 million (25%)

Several large deals contributed to the impressive first half showing. Representing its strong device industry, Minnesota reported 4 deals over $20 million each (Holaira, Inspire Medical, NxThera, Tendyne), Missouri's Essence Group Holdings raised $71 million in the software and services sector, Michigan's ProNai Therapeutics, a biotech company, attracted $60 million, Orthopediatrics, an Indiana device company, received $39 million, and Ohio's Aerpio Therapeutics raised $22 million.

For complete state and region results across the Midwest see the following tables.

Table: Midwest Healthcare Venture Investment (By State)

State	First Half 2014		First Half 2013		First Half 2012		First Half 2011		First Half 2010
	$	# of	$ Millions	# of Cos.	$ Millions	# of Cos.	$ Millions	# of Cos.	$ Millions	# of Cos.
	Millions	Cos.	$ Millions	# of Cos.	$ Millions	# of Cos.	$ Millions	# of Cos.	$ Millions	# of Cos.
Illinois	52.6	10	27.1	4	84.3	4	18	1	123.4	6
Indiana	100.8	18	11.7	5	51.6	9	10.5	4	18.4	10
Iowa	N/A	1	-	-	-	-	-	-	-	-
Kansas	5	1	7	1	-	-	3	1	18.9	4
Kentucky	-	-	-	-	25.9	2	4.1	4	10.5	2
Michigan	113.9	8	37.9	6	55.9	9	21.8	5	35.8	5
Minnesota	183.5	43	69.3	45	86.1	9	88.3	13	42.8	7
Missouri	85.1	5	14.1	6	32.4	1	32.2	4	5.7	2
Ohio	155.3	31	154.9	38	126.4	44	80.1	25	47.3	27
Western Pennsylvania	63.6	18	17.3	8	32.8	12	8.2	12	59.6	7
Western Pennsylvania	63.6	18	17.3	8	32.8	12	8.2	12	59.6	7
Wisconsin	17.5	4	11.5	4	15.2	7	49	6	50	5
Total	777.3	139	350.8	117	510.6	97	315.2	75	412.4	75

Table: Midwest Healthcare Venture Investment (By Region)**

Region	First Half 2014		First Half 2013		First Half 2012		First Half 2011		First Half 2010
	$	# of	$ Millions	# of Cos.	$ Millions	# of Cos.	$ Millions	# of Cos.	$ Millions	# of Cos.
	Millions	Cos.	$ Millions	# of Cos.	$ Millions	# of Cos.	$ Millions	# of Cos.	$ Millions	# of Cos.
Chicago	48.3	9	27.1	4	84.3	4	18	1	123.4	6
Indianapolis	39.5	10	1.6	2	50.5	8	10.5	4	14.8	6
West Lafayette	15.9	4	0.2	2	-	-	-	-	2.8	2
Louisville			-	-	N/A	1	4.1	3	10.5	2
Detroit-Ann Arbor	100.3	6	37.9	5	55.9	9	21.8	5	31.7	4
Minneapolis	183.5	43	69.3	45	86.1	9	88.3	13	42.8	7
St. Louis	85	4	14.1	6	32.4	1	32.2	4	5.7	2
Kansas City*	5	1	7	1	-	-	3	1	18.9	4
Cincinnati*	43.3	3	42	3	40.2	5	23.8	4	7	2
Cleveland	97.7	24	79.1	27	104.1	34	50.2	18	36.7	17
Columbus	14.3	4	33.7	8	8.1	6	6.1	14	2.6	4
Pittsburgh	63.6	18	17.3	8	32.8	12	8.2	12	59.6	7
Wisconsin	17.5	4	11.5	4	15.2	7	49	6	50	5

* Border MSAs such as Kansas City and Cincinnati include deals from both states in those geographies; deals are aggregated into state totals based on the MSA's principal state

**Regions' totals do not equal states as not all areas are included in list of regions

The Midwest Healthcare Venture Investment Report includes all reported numbers and regionally collected data. Data are compiled by the BioEnterprise team from PitchBook, Private Equity Week, Wall Street Journal, Venture Source, SEC Filings, company press releases, www.biospace.com, and Midwest bioscience organizations and institutions.

The Report is funded, in part, by philanthropic support from the Fund For Our Economic Future, the Cleveland Foundation and the Burton D. Morgan Foundation.

To view additional data about Midwest healthcare business activity visit http://www.bioenterprise.com/Reports/.

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 healthcare companies.

BioEnterprise partners are Case Western Reserve University, Cleveland Clinic, University Hospitals, Summa Health System, and the Austen BioInnovation Institute in Akron. Additional technology partners include the NASA Glenn Research Center, Cleveland State University, NorTech, and BioOhio.

The initiative comprises the collective activities of BioEnterprise and its partners' commercialization offices: the Case Office of Technology Transfer, Cleveland Clinic Innovations, University Hospitals Case Medical Center - Center for Clinical Research and Summa Enterprise Group. The combined efforts of these groups has created, recruited, and accelerated more than 170 companies in twelve years.

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SOURCE BioEnterprise Corporation