Midwest Health Care Startups Raise $726 Million in First Half of 2007

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CLEVELAND–(BUSINESS WIRE)–Midwest health care startups reported a stunning $726 million in total investments across 59 companies in the first half of 2007, according to the BioEnterprise Midwest Health Care Venture Investment Report. That investment level nearly equals investments for the entire calendar year 2006, which was a record year for the Midwest. Ohio, Minnesota, and Indiana led all Midwestern states in health care venture capital attraction, accounting for over two-thirds of the region’s total investment.

“Coastal investors have clearly discovered the Midwest’s abundance of investment opportunities,” said Baiju R. Shah, President of BioEnterprise. “The investment deals are getting larger and each region is seeing more East and West Coast venture firms participate.”

Ohio is leading the pack, with health care ventures attracting a record $244.3 million so far in 2007. Those deals include large financings such as Athersys ($65 million), Franklin & Seidelmann ($25 million) and numerous others.

Minnesota ($126.0 million) and Indiana ($117.8 million) follow Ohio. Two startups in those states received particularly significant investments—Minnesota’s CVRx ($65 million) and Indiana’s Targanta Therapeutics ($70 million).

“Leading coastal venture capital firms, such as Burrill & Company, MPM, New Enterprise Associates, Oak Investments, Orbimed, Polaris Ventures, Psilos Group and Radius Ventures, are making Midwest investments,” said Shah. “Midwest deals have gained notice because of successful Midwest industry exits — IPOs and acquisitions, and the significant amount of public funds spent in developing rich pipelines by Midwestern States (Ohio, Michigan, Pennsylvania, etc.).”

Michigan ($63.4 million), Illinois ($42.5 million), Missouri ($25.6 million), Wisconsin ($16.11 million), and Kentucky ($5 million) follow the top three states. In addition, Western Pennsylvania companies attracted $85.4 million in financing.

Iowa, Kansas and West Virginia did not report financings.