Indiana’s health care and life sciences sector sees VC funding drop 54% in 2023

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Indiana’s health care and life sciences sector, often hailed as a key driver of the state’s economy, saw venture funding fall by 54% last year, in line with a sharp downturn in VC funding nationwide.

Thirty-four Indiana companies landed $287 million in venture capital in 2023 to help finance a wide array of technologies, from medical isotopes to stem-cell therapies, according to BioCrossroads, an Indianapolis-based group that promotes and invests in the state’s life sciences sector and tracks the funding.

That compares to $619.8 million in venture funding for 37 companies in 2022, which was a record amount.

Venture capital is a critical source of funding for early-stage and mid-stage companies that are too young or too untested to go public or merge with a larger company. It’s seen as a key indicator of a sector’s health and potential growth.

Earlier this month, BioCrossroads released a report that said Indiana’s pharmaceutical and medical device sectors are starting to lag the nation in growth and market share and will require a focused effort to stay competitive.

The falloff in venture funding seems to be in line across a wide array of industries in Indiana and nationwide.

Nationally, the number of venture deals dropped 23% last year, and the value of those deals dropped 30%, to $170.6 billion, according to PitchBook, a Seattle-based company that tracks venture capital, private equity and mergers and acquisitions.

Indiana life science companies signed 34 venture deals last year, for an average deal amount of $8.5 million. That’s down sharply from the year before, when companies signed 40 deals worth an average amount of $15.5 million.

In addition to the biotech and pharmaceutical companies, the sector includes agricultural technology, digital health, medical device, and orthopedics sectors.

Companies often use the venture funds to pay for expensive clinical trials and to develop and test prototypes. Investors give the companies money in exchange for partial ownership in the growing companies.

Last year’s deal sizes ranged from $20,000 to $116 million. Four companies accounted for the lion’s share of the funding, $252.3 million. The other 30 companies split the remaining $35 million.

The wide range of funding amounts often reflects that some companies are farther along in their research and development and need huge sums to advance their experimental products or services.

Eleven companies made the list two years in a row, showing that investors have ongoing confidence in their progress.

Here is a list of the top 10 Indiana recipients of venture capital funding in 2023:

• Sudo Biosciences, Carmel, $116 million to develop drugs for immune disorders.
• AZIsotopes, Bunker Hill, $55.6 million to make medical isotopes to treat cancer.
• Ossium Health, Indianapolis, $50.7 million to develop stem-cell therapies to improve human health through bioengineering, and treat patients with blood cancers and improve organ transplantations.
• On Target Laboratories, West Lafayette, $30 million to develop fluorescent imaging technology designed to target and illuminate cancer during surgery.
• Prevounce Health, Indianapolis, $7 million to develop remote monitoring platform intended to create patient-focused and wellness programs.
• GeniPhys, Indianapolis, $6 million to develop a highly-purified form of collagen that is used to support tissue generation.
• Vital View Technologies, South Bend, $4.5 million to develop a digital device to monitor a heart-failure patient’s vital signs.
• Torigen Pharmaceuticals, Farmington, $4 million to develop immunotherapy cancer treatment for animals.
• Zorion Medical, Zionsville, $2.5 million to develop a medical device to treat peripheral vascular problems.
• Adipo Therapeutics, Indianapolis, $1.5 million to develop polymer nano polymers for treatment of obesity-related diseases.