Sansoro Health


Q3 Investment Report: Medical Alley’s Ecosystem Benefits from Growth in both Device and Digital Health

November 13, 2018 | Tags: , , , , , , ,

The year may be racing for the finish line, but Medical Alley early- and growth-stage companies won’t be eager to see it end. The first half of the year put 2018 close to the pace set by the record-breaking 2017 and the third quarter didn’t break stride. Companies based in Medical Alley raised $176,089,457 in Q3, the second best Q3 in the last five years, and keeping the region on pace to break a half-billion dollars in total money raised in 2018.

Biotech and digital health continued their strong years, but perhaps the most interesting insight that can be pulled from the data is that medical device – which had swooned a bit – seems to have returned to the forefront of investors’ minds.

Q3 Breakdown: From Strength to Strength

Q3 saw $176 million raised by 27 companies and the year-to-date reached $416M raised by 64 companies. While Q3 is down from a year ago, that is due in large part to fewer post-IPO raises in the quarter than there were in 2017. Removing those post-IPO numbers shows continuing strength in fundraising.

2017 had Bright Health’s massive raise of $160 million, an all-time Minnesota record. Comparing 2018 to 2017 without Bright Health shows the community’s great foundation and an expanding pool of Series A/B-type investments.

Device Investment Returns to Industry Capital, Medical Alley

Though the Medical Alley region has come to be known for its contributions across the healthcare spectrum, but there’s little doubt that medical device companies were integral in establishing the region as a healthcare hub. After decades of strong growth, the 2000’s dot-com bubble ushered in a lost decade for investment in technology, including medical devices, in Minnesota. Fortunately, investment in healthcare broadly has been on the rise since 2009, a trend that looks set to continue in 2018.

In the Q3 of 2018, Medical Alley device companies raised $90 million, pushing the total for the year to nearly $200 million raised by 33 companies. Q3’s largest raises in device included Urotronic ($26 million), 4C Medical ($17 million), and Cardialen ($17 million).

2017 was an especially strong year with multiple growth capital rounds raised in excess of $20 million. Looking over the five-year period from 2014 to 2018, nearly $1.5 billion has been raised by 118 device firms, $300 million more than the 2009-2013 period. With a quarter to go, the gap is likely to widen even more. Venture investing can be highly volatile quarter-to-quarter and thus we take greater interest in examining total investment over five- and ten-year periods to correspond with the lifecycles of many investment funds.

The $1.6 billion in device investment raised in the last five full years (2013-2017) makes Medical Alley not only the top region for medical device investment in the Midwest, but the top region for all healthcare investment in the Midwest, surpassing Ohio and Illinois by hundreds of millions of dollars.

Biotech Sets New Milestone in Medical Alley

Biotech continues its impressive run, breaking $100 million in capital raised in a year for the first time in Medical Alley history. $104 million has been raised through three quarters by 14 companies. Recombinetics had the largest Q3 raise with $34 million led by Gundersen Health System. This comes on the heels of a $7 million raise earlier this year, bringing their annual total to $41 million.

Recombinetics’ gene editing technology is making waves in the media, including coverage for their recent partnership with Medical Alley Association Foundational Member Mayo Clinic to grow human heart cells for eventual transplantation. They join fellow MAA member Miromatrix in leading the way toward a reduced need for long transplant waiting lists.

Drawing on the leadership of the University of Minnesota and Mayo Clinic, Medical Alley has a long history in biotechnology and pharmaceuticals. Leadership from companies like Upsher-Smith LLC, Bio-Techne and Be the Match is increasingly augmented by startups like Recombinetics, Stemonix, and Vyriad.

Digital Health Cements Position in Medical Alley

Digital Health investment continued its strong run with $32 million raised in the third quarter for a year-to-date total of $116 million. Taking into account the lower startup capital requirements compared to device or biotech, the quarter’s $32 million raise is a strong number.

Praestan Health ($12 million) and Learn to Live ($6.5 million) had large raises and represent a growing trend of investment in mental and behavioral health; in fact, no digital health company in Medical Alley bested Praestan’s $12 million raise. Medical Alley companies are making significant strides to eliminate the stigma around mental health and to create effective, novel solutions for mental illnesses.

Sansoro Health ($8 million) had the other major raise for the quarter. The demand for interoperability is driving solutions like Sansoro’s to the forefront of health innovation.

All Major Sectors in Medical Alley Break $100 million Raised for First Time

All three major sectors of the Medical Alley health innovation cluster broke $100 million in funding for the first time. Diversity is becoming a major strength of the cluster, insulating Medical Alley from the ups and downs of the finance world, and making it easier to attract top talent to the region. While historically Medical Alley was dependent on one sector – medical device, especially implantable and interventional devices – increasingly digital health and biotech are raising major growth rounds, seed rounds and everything in between.

With a balanced regional portfolio of growing companies, a year of strong exits, and still a quarter to go, Medical Alley is positioned to grow its leadership as the global epicenter of health innovation and care.


October 4, 2018: In The Know

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Myant announces textile computing collaboration with Mayo Clinic

gBETA Medtech Accelerator – Filling a Critical Gap for Start-Ups

Finalists Selected for Minnesota High Tech Association’s 2018 Tekne Awards

SPR Therapeutics Awarded $10M From U.S. Department of Defense

New Device Makes Early Lung Cancer Detection Possible

Q&A: Andy Slavitt and Mark Addicks 

Abbott’s next-gen FreeStyle Libre wins CE Mark

Minnetronix Neuro Successfully Completes First Clinical Study in Hemorrhagic Stroke

Ecolab Obtains First-to-Market EPA-Registered Laundry Disinfectant Claim against Clostridium difficile

SPR Therapeutics Announces First Use of SPRINT extensa Dual-lead Peripheral Nerve Stimulation System to Treat Low Back Pain

New Clinical Data Shows Decreased Catheter-Related Infection Risk with Use of SecurAcath

Humanetics Corporation Presents Data on New Drug to Prevent Radiation Injury

Baylor, Rebiotix Find Patient Microbiome Signatures That Differentiate Disease States

Pursuit Vascular Outlines Expansion Plans

CathVision Receives ISO 13485:2016 Certification

New Mayo Clinic GeneGuide DNA testing application provides genetic testing, insights backed by Mayo Clinic expertise

Be The Match BioTherapies® and Cryoport Announce Strategic Partnership to Deliver Integrated End-to-End Supply Chain Services to the Cell and Gene Therapy Industry

Are interoperability and innovation possible in the age of EHRs?


August 16, 2018: In The Know

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Mayo Clinic names Farrugia as new CEO

 

 

University of Minnesota reports breakthrough in 3-D printing for spinal cord repair

 

 

Takeda is banking on a SuperTarget-sized biologic plant in Brooklyn Park

 

 

Medtronic launches In.Pact Admiral drug-coated balloon in Japan

 

Mayo Clinic again ranked nation’s top hospital

Minneapolis Health IT Co. Sansoro Health Raises $8M

 

How Pharmacogenomics Is Improving American Healthcare

This startup is daring to bring on-demand services to health insurance

 

 

Bright Health to Enter New York City Medicare Advantage Market in Partnership with Mount Sinai Health Partners

 

 

 

Dambisa Moyo, Mildstorm CEO, elected to 3M board

 

Ancor Capital Partners Sells WellSpring Pharma Services, Inc.

 

Celcuity Reports Second Quarter 2018 Financial Results

 

 

Admedus extends successful distribution deal for medication delivery pumps

 

Fusionetics Closes Capital Investment from Stella

 

 

TE Connectivity beats the Street on Q3 results

 

 

The Microbiome Therapeutics Innovation Group Announces Coalition Formation and Leadership Team

 

 

Electromed, Inc. Announces Results of an Independent Clinical Study: Bronchiectasis Exacerbations Reduced, Lung Function Stabilized with SmartVest®


June 7, 2018: In The Know

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Bright Health Announces Rollout of Supplemental Coverage Package for its Colorado Customers

 

Upsher-Smith Enters Into Exclusive Marketing And Distribution Agreement For Six Ophthalmic/Otic ANDAs

Study: Finacial Impact of Virtual Care Patient Acquisition For Health System

 

Why 3M Is an Effective Innovator

 

Spineology Rampart One™ Standard ALIF Interbody Fusion System Gains FDA Clearance for Stand-Alone Use

 

Tactile Medical Acquires Intellectual Property Rights Related to Pneumatic Compression Device Technology

 

Exact Sciences, Mayo Clinic say they’ve developed blood test for liver cancer

 

Interoperability in Real Life: Practical Ways to Leverage APIs & Transform Healthcare

 

Abbott is developing a dual-chamber leadless pacer

 

AtriCure and Baheal Group Establish Partnership and China Distribution Agreement

 

Medtronic CEO Ishrak shows off ‘disruptive’ products to CNBC’s Jim Cramer

 

Biomerics Acquires FutureMatrix Interventional

 

Mayo Clinic Spinoff Ambient Closing on $1.5M

 

Second Major Study Demonstrates Superiority of ClearGuard® HD Antimicrobial Barrier Caps

 

Cleveland Clinic spinoff develops mouthguard that accesses concussion effects


August 17, 2017: In the Know

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  1. ImpediMed shares rise on FDA nod for Sozo system
  2. Smart Inhalers Improve Patient Compliance
  3. Sun BioPharma Files Form 10-Q for Second Quarter 2017 and Provides Clinical Update
  4. How to Pivot a Digital Health Startup: The Story Behind Apri Health
  5. UnitedHealth CEO Hemsley to step down; Wichmann named top executive
  6. Can Sansoro Health Simplify EMRs and “Fix Healthcare IT?” We Ask CEO Jeremy Pierotti
  7. MHIF Enrolls the First-in-the-World Patient in Clinical Trial of Minimally Invasive Clip-Based Repair System for Leaky Tricuspid Heart Valves
  8. 3M Appoints Microsoft CFO to Its Board of Directors
  9. EnteroMedics Prices $20m Preferred Stock Offering
  10. Global Kinetics Corp Secures First US Patent For Its Digital Health System

April 20, 2017: In the Know

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  1. Sansoro Health Raises $5.2 Million to Drive Integration of Digital Health Applications with Electronic Medical Records
  2. Rochester Startup Vyriad Expanding, Signs Lease for Ex-IBM Building
  3. DeviceTalks, Medical Alley Partner to Create a World-Class, Medtech Experience Only at DeviceTalks Minnesota
  4. Partnerships Make a More Affordable Campus
  5. Mayo Plans ‘Training and Command Center’
  6. Creating IT Futures, Minneapolis Urban League & City of Minneapolis Bring IT-Ready Career Program Downtown
  7. Blue Cross and Blue Shield of Minnesota Announces New “Future of Health Care” Initiative
  8. Blue Cross CEO ‘Cautiously Optimistic’ About Individual Market
  9. The Role of Health Technology in Lessening Pressures on the NHS
  10. Zyga Announces 100th Patient Enrolled in Clinical Study on Simmetry Sacroiliac Joint Fusion
  11. Medtronic Signs Definitive Agreement to Divest a Portion of Its Patient Monitoring & Recovery Division to Cardinal Health for $6.1 Billion
  12. Surmodics Appoints Lisa Wipperman Heine to its Board of Directors
  13. DiaMedica Therapeutics Completes Private Placement with U.S. Based Family Office

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