Indiana life-science companies raise record $115M in venture capital

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Brain-surgery tools. Tissue-regenerating implants. New treatments for urologic and gynecologic disorders. Cloud-based health software.

Indiana start-up companies developing these and other products raked in $115 million in venture funding last year, setting a record for the state’s life-sciences sector.

That amount is 3 percent higher than in 2017, and a whopping 133 percent higher than in 2015, according to BioCrossroads, an Indianapolis-based group that promotes the sector throughout the state.

The size of the deals ranged from $10,000 to $41 million. In all, 35 companies raised venture funding across a wide spectrum of products from medical devices and biotech therapies to software and information services.

“The thing that jumped out at me was the variety,” said Brian Stemme, who tracks venture deals for BioCrossroads, pointing to products under development ranging from cancer drugs to tele-health software.

The top three fundraisers, all based in Indianapolis, raised a total of $73.5 million, or nearly two-thirds of the total amount raised by the sector.

At the top of the list is Outpost Medicine, which is developing novel therapeutics for the treatment of urologic and gynecologic disorders. It raised $41 million from Vivo Capital, Frazier Healthcare Partners, Adams Street Partners and Novo Holdings.

In second place is health analytics software firm Springbuk, which raised $20 million from HealthQuest Capital, Lewis & Clark Ventures, Echo Health Ventures and Elevate Ventures.

In third place is Nico Corp., which is developing minimally invasive tools for brain surgery. It raised $12.5 million from undisclosed investors.

In all, 20 Indiana life-science start-ups raised at least $1 million apiece.

Venture capital is a critical source of funding for early-stage and mid-stage companies that are too young or untested to go public or merge with a larger company. Companies often use the money to fund expensive clinical trials and product testing. Investors give the companies money in exchange for partial ownership in the growing companies.

The investors last year were a mix of large and small funds. Among the biggest were Frazier Healthcare of Seattle and Vivo Capital of Palo Alto, California. The smaller investors included several Indiana early-stage funders, including Elevate Ventures, the Indiana University Philanthropic Venture Fund, BioCrossroads and  Purdue Ventures.

Altogether, they poured big money into a wide variety of start-ups from West Lafayette to Jeffersonville

Rounding out the top 10 of start-ups winning venture capital last year:

• of Indianapolis, provider of cloud-based health-management software: $7 million (Elevate Ventures, Health Cloud Capital).

•    Nanovis of Columbia City, developer of tissue-regenerating implants: $5.5 million (1st Source Bank, Commenda Capital, Elevate Ventures, Ellipsis Ventures, Micropulse, OFS Capital).

•    Scioto Biosciences of Indianapolis, developing therapies to fight serious conditions in premature infants: $4 million (Elevate Ventures, Rev1 Ventures).

•    On Target Laboratories of West Lafayette, developer of tumor-targeted fluorescent dyes to improve cancer surgery: $3.6 million (Elevate Ventures, HIG BioHealth Partners, Helsinn HealthCare, Johnson & Johnson Innovation).

•    Morris Innovative of Bloomington, provider of cardiovascular medical devices: $3.5 million (investors undisclosed).

•    Apexian Pharmaceuticals of Indianapolis, developer of cancer drugs: $2.8 million (IU Philanthropic Venture Fund and others).

•    Concordance Health Solutions of West Lafayette, developer of a medication reminder system: $2.5 million (investors undisclosed).

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