Decades-long records toppled in the second quarter of 2021 as four Medical Alley healthcare companies listed on major exchanges. Agiliti, Bright Health, CVRx, and Miromatrix raised a combined $1.46B from their listings, with Bright’s $924M offering leading the pack. Beyond the public listings, the quarter saw an impressive number of mergers and acquisitions as well as the second highest number of companies raising private equity in five years.
The major story of the quarter was IPOs. Four Medical Alley-based healthcare companies listed in two months, a record for the region since at least 2000. The listings began on April 23, as medical equipment company Agiliti (NYSE: AGTI) raised $368M. June 24 brought two more offerings, with Miromatrix (NASDAQ: MIRO) raising $43M, and Bright Health (NYSE: BHG) raising $924M, the largest ever for a Medical Alley company.
Neuromodulation innovator CVRx (NASDAQ: CVRX) closed the quarter with its $126M raise on June 30. In a statement, CEO Nadim Yared acknowledged the impact of the community on CVRx’s successes: “Being based in Medical Alley has afforded CVRx access to the highly developed medical devices ecosystem that has allowed us to bring our breakthrough therapy through the complex clinical and regulatory pathway to market. It has allowed us to build a world-class team with deep experience in implantable medical devices, as well as the ability to build our own in-house manufacturing capabilities that will allow us to scale as the company grows.”
Along with IPOs came a spate of mergers and acquisitions that expanded the reach of Medical Alley’s innovations. Medical Alley member Aldevron (Fargo) made the biggest splash in the region’s M&A news with its $9.6B acquisition by Washington D.C.-based Danaher. With the acquisition, Aldevron will retain its name and facilities as it expands its offerings to biologics researchers and distributors.
Also of note in the busy second quarter was Minnetonka’s Respicardia being acquired by ZOLL Medical Corporation in April. ZOLL was an early investor in Respicardia’s Central Sleep Apnea neurostimulator and will keep the Medical Alley company’s employees in the Minnetonka headquarters.
Other mergers and acquisitions included:
- 4/1/21: Carrus Learn (Lehi, UT) acquired Archetype Innovations (Duluth, MN)
- 4/6/21: Concord USA (Hopkins, MN) acquired Upton Hill (Edina, MN)
- 4/27/21: DispatchHealth (Denver, CO) acquired Professional Portable X-Ray (Burnsville, MN)
- 4/27/21: Hunter Street (Minneapolis, MN) acquired Kirkpatrick Dental Care (Knoxville, TN)
- 5/4/21: CVC Capital Partners (Luxembourg, BE) acquired a majority interest in Icario (Minneapolis, MN)
- 5/4/21: Provation (Minneapolis, MN) acquired iProcedures (Tampa, FL)
- 5/19/21: EPTAM (Northfield, MN) acquired Mendell (Lakeville, MN)
- 5/20/21: Recuro (Richardson, TX) acquired SupDoc (Minneapolis, MN)
- 6/1/21: Abiomed (Danvers, MA) acquired preCARDIA (St. Paul, MN)
- 6/2/21: Vyne Dental (Dunwoody, GA) acquired OperaDDS (Wayzata, MN)
- 6/8/21: Icario (Minneapolis, MN) acquired ChipRewards (Birmingham, AL)
As some of the region’s biggest success stories filed for IPOs or otherwise exited, Medical Alley’s early-stage community continued to refill the pipeline to create the next generation of IPOs and exits. 36 companies raised a total of $52M on the quarter, with Medical Device taking the largest haul ($30M) followed by Digital Health ($17M), and Biotech/Pharm ($2.4M). On the year, a total of $161M has been raised by 61 companies, the highest number of companies raising in a first half since 2014 (69).
Of the 36 companies who raised funds in Q2, 24 (66%) participated in the Angel Tax Credit Program (ATCP). The program, which was recently renewed for $5M in 2022, has helped some of the region’s most successful healthcare companies during its nine-year existence. StemoniX and Zipnosis, both of whom were acquired this year, used the program. Notably, Miromatrix, now listed as MIRO on the NASDAQ market, also used the program in 2012.
Boosted by the ATCP, Medical Alley saw a high number of early-stage companies raising seed-level rounds. Of the 36 companies that raised funds in Q2, 24 raised between $0-1M, slightly above the average count of 20 raises per quarter since 2015. For reference, the quarter with the highest number of raises since 2015 within the $0-1M range was Q4 of 2016, with sub $1M raises from, among others, 4C Medical Technologies, OneOme, Pops Diabetes Care, and StemoniX, all of whom have gone on to raise more substantial rounds.
To assist this next generation of startups, the Medical Alley Association launched Medical Alley Starts in early Q1 of 2021. This service helps to lower the cost of starting, scaling, and pivoting new ventures in Medical Alley. In the second quarter, Medical Alley Starts provided 335 services to 152 companies, including 65 supplier referrals, 49 investor introductions, 35 corporate development connections, and 66 peer-to-peer connections. If you would like to learn more about Medical Alley Starts, please contact Filip Kostal, Startup Principal, at [email protected].
In the wake of a historically successful quarter, Medical Alley continues to forge ahead as The Global Epicenter of Health Innovation and Care®. Formerly early-stage companies have hit the public market at record rates or have acquired or been acquired to broaden their reach. At the same time, current early-stage companies are laying the groundwork for future exits, with the help of the state-run Angel Tax Credit Program and Medical Alley’s own Medical Alley Starts. Expect much to come from the Medical Alley region in the months and years to come.
