Published in Finance

VC investing remains strong for Midwest life sciences firms

BY Sunday, February 21, 2016 09:57pm

Elevated by a couple of major investments, venture capital investing in Michigan life sciences companies in 2015 equaled the dollar value from the prior year with a high number of deals.

Venture capital investors put $131.73 million into 16 deals in Michigan last year, which compares to $131.7 million in 11 deals in 2014, according to an annual report by BioEnterprise Corp., a Cleveland-based initiative that tracks investments in health care and life sciences firms across the Midwest.

The last two years were the best ever for venture capital investing in Michigan-based life sciences companies. The year included major fundraising rounds such as the $39.5 million invested in September in Plymouth-based Delphinus Technologies Inc., the developer of a three-dimensional imaging device to screen for breast cancer.

Michigan Critical Care Consultants Inc., a Dexter-based developer and manufacturer of cardiopulmonary medical devices, received a $34 million investment in November.

West Michigan had four of the deals in the state for a total of $6.46 million. They were:

n$3.54 million in Series A financing in January 2015 for Kalamazoo-based Armune BioScience Inc., which is commercializing a new-generation blood test for men suspected of having prostate cancer.

n$1.5 million invested in June by Michigan Accelerator Fund I in RespondWell LLC, a Grand Rapids-based digital health company.

nGrand Rapids-based Tetra Discovery Partners LLC, which is developing a new drug to treat Alzheimer’s disease that will go to clinical trials this year, received a $1.0 million investment from Grand Angels Venture Fund II in September.

nKalamazoo-based Impact Athletic LLC, a maker of mobile tables for athletic trainers, got $420,000 in venture funding in November from undisclosed investors.

The Detroit/Ann Arbor region had 12 deals for $125.27 million, according to BioEnterprise.

Across the 11 Midwest states, venture capital investing totaled $1.53 billion through 303 deals. That’s the second-largest amount ever invested in Midwest life sciences companies by venture capital firms, exceeded only by the $1.78 billion invested in 243 deals in 2014.

“Midwest health care continues to perform at historic levels,” said BioEnterprise President and CEO Aram Nerpouni. “The medical device sector continues to thrive, attracting record dollars. Biotech and health care software and services are also at or near peak activity. Overall, there is a healthy diversity of sector activity across an increasingly important geography.” 

Medical device companies in the Midwest got the largest share of the 2015 funding, $737 million, or 48 percent of the total. They were followed by health care information technology, software and services companies at $450 million, or 29 percent. Biotechnology and pharmaceutical companies received $352 million, or 23 percent of the funding in the Midwest.

In Michigan, 2015 began with the largest venture capital deal ever in the state when Ann Arbor-based Millendo Therapeutics Inc. secured $62 million as it works to commercialize a drug to treat polycystic ovary syndrome in women. 

Also in January, Grand Rapids-based Grand River Aseptic Inc. closed on a $350,000 later-stage investment from undisclosed investors. 

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