Midwest healthcare companies attracted $1.8 billion in new investments across 243 companies in 2014, according to the BioEnterprise Midwest Healthcare Growth Capital Report. The totals are the highest recorded in both dollars and number of companies funded since BioEnterprise began compiling the report in 2005, surpassing the banner 2007 by 46% and 2013 by 135%. BioEnterprise is a business formation, recruitment, and acceleration initiative designed to grow healthcare companies and commercialize bioscience technologies based in Cleveland, Ohio.

Ohio ($499 million) and Minnesota ($406 million) led Midwestern states in attracting investment dollars; Minneapolis ($403 million) and Cleveland ($398 million) were the leaders among Midwest regions. In both states and regions the number of companies receiving funding decreased.

"The significant increase in Midwest healthcare growth funding mirrors the national trend, as does the decrease in the number of early stage companies receiving funding in certain Midwest states and regions. The deals are getting bigger and this signifies a maturing of the Midwest healthcare innovation ecosystem," said Aram Nerpouni, president and CEO of BioEnterprise.

"Interestingly, several Midwest states and regions, such as Illinois and Wisconsin, experienced large increases in both funds attracted and companies funded," said Nerpouni. "All in all there is a robust pipeline of attractive healthcare companies in all stages building rapidly in the Midwest."

The largest reported Midwest deal occurred in Wisconsin, where Shine Medical Technologies, a biotech company, raised $125 million. Naurex, an Illinois biotech, attracted two significant raises in 2014, totaling $105 million.

By sector, the 2014 growth capital funding was allocated as follows:

• Biopharmaceutical companies: $629 million (35%)
• Medical device companies: $593 million (33%)
• Healthcare IT and service companies: $562 million (32%)

"As with the national trend, the largest sector growth in the Midwest occurred in healthcare IT and services," said Nerpouni. "In 2013, the HIT and services sector comprised only 16% of the total funding, doubling to 32% in 2014."