According to data collected and analyzed by BioEnterprise, a Cleveland, Ohio-based life science business development group, medical device investments in the region grew last year while biotech investments took a nosedive.
Overall, healthcare venture capital in the Midwest leveled off at $758 million in 2013 after a banner year in which it reached $996 million in 2012, according to BioEnterprise’s Midwest Healthcare Venture Investment Report.
Buoyed by $15 million-plus rounds for Minnesota-based Conventus Orthopaedics, NxThera and CVRx, along with Cleveland-based ViewRay and ALung Technologies in Pittsburgh, Pa., the device sector attracted a total of $423 million in venture dollars last year --- a 37 percent spike compared with 2012.
"Overall, Midwest healthcare investment activity reflects the nationwide decrease in healthcare investing; however, Midwest investment remains strong, outpacing 2009 and 2010 in investment dollars attracted. In addition, greater numbers of Midwest healthcare companies received funding in 2013 than in any of the previous five years," said Aram Nerpouni, president and CEO of BioEnterprise. "The Midwest has developed a robust pipeline of high-quality companies."
--- Medical device companies: $423 million (59 percent)
--- Biopharmaceutical companies: $183 million (25 percent)
--- Healthcare IT and service companies: $117 million (16 percent)
Nearly three-quarters of last year's total heathcare funding went to companies in Minnesota, which garnered $227.7 million, and Ohio, which lured 295.8 million from investors. Michigan medtech firms attracted $70.2 million in financing, while western Pennsylvania received $46.2 million, the BioEnterprise report states. Kansas and Kentucky solicited nearly identical backing, at $10.2 million and $10.4 million respectively.
Minneapolis companies gobbled up all of Minnesota's capital but Michigan split its resources among firms in the Detroit-Ann Arbor region ($65.2 million) and southwestern part of the state ($4.5 million). Ohio, meanwhile, divvied up its cash among companies in Cincinnati ($53.8 million), Cleveland ($201.2 million) and Columbus ($40.9 million). Indianapolis, Ind., companies took the lion's share of Hoosier State cash ($20.6 million of the $31.9 million total) and Chicago, Ill.-based firms accepted the entire $30.1 million allocated to the Land of Lincoln, the report indicates.
Investments in health IT companies in the region also took a slight dip, falling from $177 million in 2012 to $117 million last year.
BioEnterprise officials pointed out in the release of the report that more companies received funding in 2013 than in any of the previous five years.
“The Midwest, in contrast to other parts of the country, remains strong in the medical device sector; in addition, the healthcare IT sector is showing signs of steady growth, with increasing numbers of companies funded each year,” said president and CEO Aram Nerpouni in a statement. “We anticipate an ever-growing pipeline of companies, primarily in the medical device sector and followed by healthcare IT.”