Biotech companies have raised money at a fast clip so far in 2018, despite an overall slow down in fundraising among smaller health-tech start ups in the state.
The Medical Alley Association, which represents health care companies of all types in Minnesota, reports that 45 companies raised a total of $234 million during the first six months of the year. That was the second-highest first-half total in decade, but well below last year’s half-year fundraising total. (PDF.)
Biotech has been a bright spot so far this year.
More than 4,000 people currently work at more than 200 biotech companies in the state, and those numbers are growing: at least $51.8 million was raised by 10 biotech companies in the first half of the year, led by Biothera ($13.6 million raise), Vyriad ($9 million), and Vergent Biosciences ($8.7 million.)
“Biopharma is a growth sector for Medical Alley with steady increases in both funding and head count,” the trade group announcement says, noting in particular that Vyriad is investing in a 25,000-square-foot manufacturing space in Rochester for oncolytic virus anti-cancer vaccines.
However, the association said a slow-down in fundraises of less than $4 million for health care start ups is partly attributable to the loss of the state’s Angel Investment Tax Credit. ($4 million was the cap for the tax credit.)
In the first half of 2018, 34 companies had fundraises of less than $4 million, which represents a 20 percent drop from the prior year, and the lowest total since the state tax credit was first introduced.
“Clearly the loss of the Angel Investment Tax Credit had been detrimental to job growth in Medical Alley,” association CEO Shaye Mandle said in the report, urging lawmakers to reinstate the tax credit for investors in small startups.