A Diagnostics & Imaging Week

Midwest healthcare startups reported a record-breaking $1 billion in total investments for 104 companies through 3Q07, according to the BioEnerprise (Cleveland)Midwest Health Care Venture Investment Report.

The previousfull-year record for Midwest healthcare companies was $783 million in 2006. Ohio and Minnesota led all Midwestern states in healthcare investment (click here to see Table), with Cleveland and Minneapolis leading all regions, according to the report.

“This year continues trends that have been developing over the past few years,” said Baiju Shah, president of BioEnterprise. “There are more Midwestern deals each year that draw investment, the investment rounds are becoming larger, and the companies are attracting both regional and national investors for the financing.”

In addition to investments, the report noted that 2007 has seen substantial exits, including the $630 million private buyout of pharmacy benefits manager MemberHealth (Solon, Ohio) by Universal American Financial (Rye Brook, New York) and gene chip maker NimbleGen Systems (Madison, Wisconsin) — which was acquired by Roche (Basel, Switzerland) in June for $272.5 million — as well as significant public offerings, such as TomoTherapy (Madison, Wisconsin), a developer of radiation treatments for cancer, which raised more than $189 million and specialty pharmaceutical company Eurand’s (Vandalia, Ohio) $123 million IPO.

By industry sub sector, the investment funding breaks down as follows:

• Biopharmaceutical companies: $591 million

• Medical device companies: $251 million

• Healthcare software and service companies: $158 million.