Ohio was the top state in the Midwest in attracting financing for health-care startups in the first half of 2012, according to the BioEnterprise Midwest Health Care Venture Report. Forty-four Ohio companies accounted for $126.4 million in total investment, up from 25 companies and $80.1 million invested in the first half of 2011.
Overall, 97 Midwest health-care startups attracted $510.6 million—the highest recorded investment amount and number of companies in the last five years. “Ohio is just a very strong health care state. It has been since we started this report in 2003,” says Baiju Shah, president and CEO of BioEnterprise, a group that aims to boost the growth of bioscience companies.
That success is driven by assets such as the Third Frontier program, which “have generated a string of new companies in our state that are based on the innovations coming out of those clinical research institutions or industry professionals, and given them the capital to launch in a way that then becomes attractive to venture capital,” Shah says.
Two of the biggest deals, which helped push Ohio to the top, were both in Cleveland. ViewRay, a developer of radiation therapy technology, raised $25 million, while Juventas Therapeutics, which provides regenerative therapies, raised $22.2 million. Overall, Cleveland recorded 34 companies and capital of $104.1 million, while Cincinnati had five startups and $40.2 million.
Columbus, despite being a health-care hotbed, didn’t perform as well, with just six companies and $8.1 million in capital. EndoSphere, a provider of endoscopically implantable devices, attracted $4 million. HealthSpot, a technology firm, garnered $2 million and Minimally Invasive Devices, which developed an anti-fogging device for surgical tools, secured $1 million.
Shah referred BizBuzz to BioOhio for comment about why Columbus fell behind, but officials there declined to talk, saying they’re still crunching numbers.
“One of the things that differentiates Ohio is the ecosystem of support that’s available for an entrepreneur,” Shah says. “Whether it’s entrepreneurial assistance groups, political institutions that are willing to partner with startup companies, technical advisors and, of course, management talent, that ecosystem needs to be maintained and further strengthened. That is how we will become not just one of the health-care leaders in the Midwest, but one of the health-care leaders in the country.”
Reprinted from the September 2012 issue of Columbus C.E.O. Copyright © Columbus C.E.O.