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Midwest Health Care Startups Raise $287 Million in First Half 2006; Investments Up 10 Percent From First Half 2005; Illinois, Minnesota, and Ohio Lead States

Posted on: Wednesday, 26 July 2006, 15:00 CDT

Midwest health care startups reported $287 million in total investments in the first half of 2006, according to the Midwest Health Care Venture Investment Report released by BioEnterprise. The total represents a 10 percent increase compared to the like period in 2005; for the second quarter alone, investments increased 36 percent compared to Q2 2005.

Illinois leads the states with $101.6 million in new investments, which is more than that state recorded in 2003, 2004, and 2005 combined. The Illinois results were boosted by a $57.0 million investment in NanoSphere that occurred in May 2006; seven other Illinois companies also reported financings. Minnesota ($61.0 million) and Ohio ($47.9 million) continue to report strong results. Of note, Ohio led the Midwest in number of companies that raised capital (14).

The report aggregates venture investment in 10 Midwest states and Western Pennsylvania. Following the leaders are Missouri ($37.2 million) and Western Pennsylvania ($20.1 million). Also, financings were reported in Indiana ($9.5 million), Michigan ($5.6 million), Wisconsin ($3.1 million), and Kentucky ($0.5 million). States not reporting financings included Iowa, Kansas, and West Virginia.

"Health care investments in are gaining momentum in the Midwest," said Baiju R. Shah, President of BioEnterprise. "One of the drivers is increased interest in Midwest biopharmaceutical companies. Traditionally, the Midwest is recognized for its strong medical device deal flow. Increasingly, investors are finding attractive biopharmaceutical deals here. The Midwest distribution across the health care sectors is now the same as the national allocation across the industry."

By sector, the funding was allocated as follows:

-- Biopharmaceutical companies: $154 million (54 percent) in 17

companies, and

-- Medical device companies: $87 million (30 percent) in 19

companies, and

-- Health care software and service companies: $46 million (16

percent) in 12 companies.

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. Table: Midwest Health Care Venture Investment State First Half 2006 First Half 2005 ---------------------------------------------------------------------- $ Millions # of Cos. $ Millions # of Cos. ---------------------------------------------------------------------- Illinois 101.6 8 12.5 5 ---------------------------------------------------------------------- Indiana 9.5 4 1.5 1 ---------------------------------------------------------------------- Iowa - 0 - 0 ---------------------------------------------------------------------- Kansas - 0 - 0 ---------------------------------------------------------------------- Kentucky 0.5 1 19.3 2 ---------------------------------------------------------------------- Michigan 5.6 3 8.5 2 ---------------------------------------------------------------------- Minnesota 61.0 7 85.6 14 ---------------------------------------------------------------------- Missouri 37.2 7 41.6 4 ---------------------------------------------------------------------- Ohio 47.9 14 72.2 6 ---------------------------------------------------------------------- Western Pennsylvania 20.1 3 16.5 2 ---------------------------------------------------------------------- West Virginia - 0 - 0 ---------------------------------------------------------------------- Wisconsin 3.1 2 5.1 2 ---------------------------------------------------------------------- Total 286.6 49 262.4 38 ---------------------------------------------------------------------- Sources: Compiled by BioEnterprise team from Venture Wire, Private Equity Week, Wall Street Journal, Venture Source, SEC Filings, company press releases, and www.biospace.com.

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 health care companies. BioEnterprise's partners are Case Western Reserve University, The Cleveland Clinic Foundation, University Hospitals Health System, and Summa Health System. Additional technology partners include the NASA Glenn Research Center, Cleveland State University, NorTech, and Omeris.

The BioEnterprise Initiative comprises the collaborative activities of BioEnterprise Corporation, Case Research Institute Office of Technology Transfer, Cleveland Clinic Innovations, and Summa Enterprise Group. The combined efforts of these groups has created, recruited, and accelerated more than 50 companies in four years.

Source: Business Wire

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