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Deals up, dollars down in 2013 for Indiana life sciences firms

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A record number of Hoosier life sciences companies secured financing in 2013—but the total money they raised was only half as much as the year before.

According to data from BioEnterprise, an Ohio-based life sciences development group, venture capitalists and angel investors put a combined $31.9 million into 18 life sciences companies last year.

That compared to $64.7 million invested in 11 companies in 2012, according to BioEnterprise data.

Warsaw-based Nextremity Solutions, an orthopedic-implant maker, attracted the largest investment—$10 million from Rockport Venture Partners. After that, the next-largest hauls went to these Indianapolis-based firms:

-    hc1.com, a provider of customer relationship management software for health care providers: $4.64 million from undisclosed investors.
-    FAST BioMedical, a maker of diagnostic tests for hospital patients: $3.33 million from Elevate Ventures and angel investors.
-    Wellfount Corp., maker of health information technology for nursing home pharmacies: $2.5 million from undisclosed investors.
-    ApeX Therapeutics, which is developing drugs for cancer and eye disease: $2.5 million from BioCrossroads.
-    AgeneBio, which is developing Alzheimer’s therapies: $2 million from angel investors.

A list of all 2013 life sciences deals in the Midwest can be found here.

The number of companies receiving money last year was the highest state total since BioEnterprise began keeping statistics on Midwestern life sciences investments in 2005. The previous record was 16 companies in 2010.

Deal flow was a tick higher in the Indianapolis region. Eleven area companies attracted investments, more than in any year since 2005. In 2012, 10 Indianapolis-area life sciences firms attracted investments.

In 2013, a total of $20.6 million was invested in life sciences companies in the Indianapolis area. That was down from 2012, when the statewide haul of $64.7 million was boosted by Strand Analytical's securing $30 million and Esanex, a spinout of Eli Lilly and Co., attracting $15 million.

The trends in Indiana were mirrored across the Midwest, where the number of companies receiving investments rose to 217 last year from 182 the year before. But total investments fell to $758.4 million from $995.7 million the year before.

“Overall, Midwest health care investment activity reflects the nationwide decrease in health care investing,” said Aram Merpouni, CEO of BioEnterprise, in a prepared statement. But, noting the record number of deals across the Midwest, he added, “The Midwest has developed a robust pipeline of high-quality companies.”

BioEnterprise collects investment data from 10 Midwestern states and the western portion of Pennsylvania around Pittsburgh. Combined, the region had a population in the 2010 Census of nearly 72 million people. Indiana accounted for 9 percent of that population.

But Indiana continues to grab an undersized portion of the Midwest’s life sciences investments. Its share of the Midwest pie last year was 4.2 percent. And its average of the past nine years has been just 6.2 percent.

Hoosier companies receiving investments last year, as a percentage of all Midwestern life sciences investments, was 8.3 percent—closer to Indiana’s share of the region’s population. Indiana’s share of deals over the past nine years has averaged 6.9 percent.

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  1. Cramer agrees...says don't buy it and sell it if you own it! Their "pay to play" cost is this issue. As long as they charge customers, they never will attain the critical mass needed to be a successful on company...Jim Cramer quote.

  2. My responses to some of the comments would include the following: 1. Our offer which included the forgiveness of debt (this is an immediate forgiveness and is not "spread over many years")represents debt that due to a reduction of interest rates in the economy arguably represents consideration together with the cash component of our offer that exceeds the $2.1 million apparently offered by another party. 2. The previous $2.1 million cash offer that was turned down by the CRC would have netted the CRC substantially less than $2.1 million. As a result even in hindsight the CRC was wise in turning down that offer. 3. With regard to "concerned Carmelite's" discussion of the previous financing Pedcor gave up $16.5 million in City debt in addition to the conveyance of the garage (appraised at $13 million)in exchange for the $22.5 million cash and debt obligations. The local media never discussed the $16.5 million in debt that we gave up which would show that we gave $29.5 million in value for the $23.5 million. 4.Pedcor would have been much happier if Brian was still operating his Deli and only made this offer as we believe that we can redevelop the building into something that will be better for the City and City Center where both Pedcor the citizens of Carmel have a large investment. Bruce Cordingley, President, Pedcor

  3. I've been looking for news on Corner Bakery, too, but there doesn't seem to be any info out there. I prefer them over Panera and Paradise so can't wait to see where they'll be!

  4. WGN actually is two channels: 1. WGN Chicago, seen only in Chicago (and parts of Canada) - this station is one of the flagship CW affiliates. 2. WGN America - a nationwide cable channel that doesn't carry any CW programming, and doesn't have local affiliates. (In addition, as WGN is owned by Tribune, just like WTTV, WTTK, and WXIN, I can't imagine they would do anything to help WISH.) In Indianapolis, CW programming is already seen on WTTV 4 and WTTK 29, and when CBS takes over those stations' main channels, the CW will move to a sub channel, such as 4.2 or 4.3 and 29.2 or 29.3. TBS is only a cable channel these days and does not affiliate with local stations. WISH could move the MyNetwork affiliation from WNDY 23 to WISH 8, but I am beginning to think they may prefer to put together their own lineup of syndicated programming instead. While much of it would be "reruns" from broadcast or cable, that's pretty much what the MyNetwork does these days anyway. So since WISH has the choice, they may want to customize their lineup by choosing programs that they feel will garner better ratings in this market.

  5. The Pedcor debt is from the CRC paying ~$23M for the Pedcor's parking garage at City Center that is apprased at $13M. Why did we pay over the top money for a private businesses parking? What did we get out of it? Pedcor got free parking for their apartment and business tenants. Pedcor now gets another building for free that taxpayers have ~$3M tied up in. This is NOT a win win for taxpayers. It is just a win for Pedcor who contributes heavily to the Friends of Jim Brainard. The campaign reports are on the Hamilton County website. http://www2.hamiltoncounty.in.gov/publicdocs/Campaign%20Finance%20Images/defaultfiles.asp?ARG1=Campaign Finance Images&ARG2=/Brainard, Jim

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