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Health care VC hits new Indiana low in 2011

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Well, that was a dud.

Last year turned out to be one of the worst in recent Indiana history for health care venture capital investment, according to data compiled by BioEnterprises, a life sciences business development group based in Cleveland.

Nine Hoosier companies landed money last year, the same as in 2010. But the total amount landed was just $14.1 million, the lowest amount of venture capital flowing to Indiana’s health care sector since BioEnterprises began tracking such deals in 2005.

In 2010, Indiana companies attracted $25.1 million and, in 2007—the peak year for the entire region—the state pulled in a whopping $135.6 million.

“Midwest biotechs are suffering from the national venture industry's shift away from early-stage biotech investing,” said Baiju Shah, CEO of BioEnterprise, in a prepared statement. But investors are putting more money into health information technology companies, along with the Midwest’s typical staple: medical-device makers.

“Venture investors are drawn by both providers and payers searching for health IT applications that can improve effectiveness and efficiency of their enterprises," Shah said.

Across all 11 states BioEnterprises tracks, life sciences venture investing rose 10 percent last year, to nearly $810 million. A total of 178 companies raised money, up from 161 the year before.

Indiana wasn’t the only area feeling pain . Michigan and western Pennsylvania both suffered big declines in life sciences venture funding, with Michigan posting its lowest total since 2005 and western Pennsylvania posting its lowest total since 2007.

Minnesota led all states with $223 million in venture investments, flowing mainly to the state’s bevy of medical-device firms. Missouri also saw a big increase last year in venture investing.

Indiana’s totals may be dampened because one of the nine companies receiving money, BioCritica Inc., did not disclose the amount it received. However, the point may be somewhat moot. BioCritica’s business plan—to reinvigorate Eli Lilly and Co.’s sepsis drug Xigris—fell flat when a new clinical trial of the drug caused Lilly to pull it from the market.

BioCritica CEO David Broecker has since joined Indianapolis-based Harlan Laboratories Inc.

The other Indiana companies that received money last year included:

— Indianapolis-based Wellfount Corp., $6 million from Michigan-based Arboretum Ventures

— Fort Wayne-based BioPoly LLC, a subsidiary of Schwartz Biomedical, $2.5 million from undisclosed investors

— Indianapolis-based FAST Diagnostics, $2.25 million from angel investors

— Carmel-based Dormir Inc., $2 million from undisclosed investors

— Brownsburg-based Biologics Modular, $750,000 from undisclosed investors

— Indianapolis-based Symbios Holdings, $300,000 from undisclosed investors

— West Lafayette-based BioSciences Vaccines, $150,000 from Purdue University’s Emerging Innovations Fund

— Indianapolis-based Aarden Pharmaceuticals, $100,000 from the Indiana Seed Fund, overseen by Indianapolis-based BioCrossroads

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  1. These liberals are out of control. They want to drive our economy into the ground and double and triple our electric bills. Sierra Club, stay out of Indy!

  2. These activist liberal judges have gotten out of control. Thankfully we have a sensible supreme court that overturns their absurd rulings!

  3. Maybe they shouldn't be throwing money at the IRL or whatever they call it now. Probably should save that money for actual operations.

  4. For you central Indiana folks that don't know what a good pizza is, Aurelio's will take care of that. There are some good pizza places in central Indiana but nothing like this!!!

  5. I am troubled with this whole string of comments as I am not sure anyone pointed out that many of the "high paying" positions have been eliminated identified by asterisks as of fiscal year 2012. That indicates to me that the hospitals are making responsible yet difficult decisions and eliminating heavy paying positions. To make this more problematic, we have created a society of "entitlement" where individuals believe they should receive free services at no cost to them. I have yet to get a house repair done at no cost nor have I taken my car that is out of warranty for repair for free repair expecting the government to pay for it even though it is the second largest investment one makes in their life besides purchasing a home. Yet, we continue to hear verbal and aggressive abuse from the consumer who expects free services and have to reward them as a result of HCAHPS surveys which we have no influence over as it is 3rd party required by CMS. Peel the onion and get to the root of the problem...you will find that society has created the problem and our current political landscape and not the people who were fortunate to lead healthcare in the right direction before becoming distorted. As a side note, I had a friend sit in an ED in Canada for nearly two days prior to being evaluated and then finally...3 months later got a CT of the head. You pay for what you get...

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