Medical Device Link.

Originally Published MX January/February 2006

BUSINESS NEWS

Venture investment in Midwestern healthcare start-ups grew 21% in the third quarter of 2005, compared with a national rise of 4% during the period, according to data from BioEnterprise (Cleveland). The group's quarterly venture investment report indicates companies in the Midwest saw investments of $144 million, up from $119 million in the second quarter.

Shah

"The numbers continue to demonstrate strong deal flow in the Midwest region," says Baiju Shah, president of BioEnterprise, an organization that supports the growth of the region's bioscience companies. "Of particular interest this quarter was the number of biotechnology financings in the region, where medical device deals are viewed as the primary strength. These included Cerenis Therapeutics in Michigan, and two Missouri deals—Kereos and Isto Technologies."

During the third quarter, investment in biotech operations represented about $65 million, or 45% of total deals. Investment in medical device operations represented about $43 million, or 30% of the deals. Year-to-date, biotech deals are also in the lead, accounting for about 35% of total investments compared with medtech's 33%.

According to Shah, these figures deviate from the expectations of investors across the nation in regard to healthcare investment in the Midwest. In a recent survey designed to gauge perceptions of the Midwest's healthcare market, BioEnterprise found that investors expected deals in the medical device sector to account for between 50 and 60% of investment, with biotech attracting only between 10 and 30%.

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