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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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