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Investments in Ohio health care, bioscience firms set record

In the first half of 2007, Ohio’s emerging health care and bioscience companies have attracted an unprecedented amount of venture capital. Through June, a record $244.3 million has been invested in 24 companies throughout the state. In comparison, Ohio health care and bioscience companies received $114 million in equity funding in all of 2006.

The figures are from the latest BioEnterprise Midwest Health Care Venture Investment Report, a quarterly assessment of health care and bioscience industry investments across the Midwest.

At $244.3 million, Ohio currently leads the Midwest pack in 2007, followed by Minnesota ($126.0 million) and Indiana ($117.8 million).

“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 investments in the first six months of 2007 include large financings such as Athersys ($65 million) and Franklin & Seidelmann ($25 million), as well as dozens of venture capital and angel investments. In April, Click4Care, a Powell, Ohio medical management software company secured a $10 million equity investment. In June, Akron-based SpineMatrix closed on an $8 million round of financing led by Psilos Group. SpineMatrix will use the money to start manufacturing and selling its technology for diagnosing back pain.

BioOhio Vice President John F. Lewis, Jr., says that the Pre-Seed Funding Initiative within Ohio’s Third Frontier Project has been instrumental to the investment surge in health care and bioscience-related ventures. The program provides grants to pre-seed funds to increase the availability of professionally managed capital to accelerate the growth of early stage Ohio technology companies.

“The state’s investment into seed and angel funds has catalyzed Ohio’s angel investors into an active group,” Lewis says. “Ohio’s angel groups like Queen City Angels, Ohio TechAngel Fund and, more recently, the North Coast Angel Fund have played a crucial role in providing due diligence, coaching, and funding to promising firms, which ultimately makes them more attractive to venture capital firms and large corporations.

To view the complete Midwest Health Care Venture Investment Report, visit www.bioenterprise.com/reports/2007/q22007vcactivityrelease.pdf.