Cleveland, OH, October 24, 2006 – 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
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