Published in Health Care

Report: Health care venture capital investment in Michigan grew significantly in 2017

BY Sunday, March 25, 2018 07:15pm

The amount of venture capital invested in biotech and health care startups based in Michigan nearly doubled in 2017.

Venture investors put $115.2 million into 18 companies last year, compared with $63 million in 23 deals the prior year and 16 deals for $132 million in 2015. Those figures come from an annual report by Cleveland-based BioEnterprise, which tracks venture investing for health care in the Midwest.

Across the entire 11-state region, 2017’s venture investing in biotech and health care startups reached an all-time high in terms of dollars.

Investors put $2.45 billion into 362 deals involving Midwest-based startups in 2017. That’s the largest investment total to date and compares to $1.72 billion invested in 375 deals in 2016.

“Midwest health care companies continue to perform at record-breaking levels,” said BioEnterprise President and CEO Aram Nerpouni.

Of the amount invested across the Midwest, nearly half, or $1.2 billion, went to health care information technology, software and services companies. Biotech and pharmaceutical companies received another $710 million, or 29 percent of the total, and medical device companies collectively got $587 million, or 24 percent of the total.

In dollar value, Illinois led the region with $866 million invested in the state across 45 deals, boosted by a $500 million investment in Chicago-based I.T. and software services company Outcome Health that was the largest single capital raise in the history of the BioEnterprise report.

Minnesota ranked second in the region with 105 deals for $560.7 million, followed by Ohio with 131 deals for $497.3 million.

West Michigan deals that closed last year on investments, according to BioEnterprise, include:

  • BFKW LLC, a Grand Rapids developer of a bariatric device to treat obesity, closed in May on $3.35 million for larger clinical trials.
  • Innovative Cardiovascular Solutions LLC closed in April on $1.68 million. The company has been developing a device that collects debris in the blood dislodged during a transcatheter aortic valve replacement procedure, reducing the chance of a blockage and preventing a potential stroke or other neurocognitive damage in the patient.
  • An investment of $1.02 million in later-stage capital in March for Holland-based Shoulder Innovations Inc., the developer of a shoulder orthopedic implant that requires 50 percent fewer instruments and fewer steps during surgery, all of which results in lower costs.
  • Ablative Solutions Inc., a Kalamazoo-based developer of a catheter system for renal denervation, which treats uncontrollable hypertension, closed in March on $11.38 million in later-stage venture capital.
  • Cirius Therapeutics Inc. raised $30 million in early-stage venture capital in a deal that closed in April. Formerly known as Octeta Therapeutics, Cirius was spun out from Kalamazoo-based Metabolic Solutions Development Co. and is developing a new treatment for nonalcoholic fatty liver disease and liver fibrosis. After the investment closed, the company relocated its corporate headquarters to San Diego but maintained R&D in Kalamazoo.
  • Newaygo-based Advanced Interactive Response Systems LLC closed in August on $230,000 in capital. The company developed a series of products to help elderly patients and their health care providers administer and track their oxygen usage.
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