INDIANAPOLIS – A new report, commissioned by BioCrossroads and conducted by the Battelle Technology Partnership Practice, takes an in-depth look at Indiana’s capital market and the innovation outputs that have resulted over two different time frames: 1993 to 2002 and 2003 to 2013. It also provides a view of future opportunities for investment growth. The Life Science Innovation Capital in Indiana report shows gains in innovation dollars as well as an increase in life sciences innovation capital that outpaced the nation between 2003 and 2013.
The report points to multiple contributors to Indiana’s capital markets – the state, universities, industry, philanthropy, angel investors, and groups like BioCrossroads – who all advanced targeted strategies to advance growth.
- Indiana-based philanthropic support for life sciences research increased from $155 million in the period from 1993 to 2002 to $373 million from 2003 to 2013. Investment from the State of Indiana’s 21st Century Research and Technology fund also increased from $28.5 million to $77.8 million during the same periods.
- Public university funding in technology commercialization funding went from being nonexistent (1993-2002) to more than $2 million (2003-2013) and foundation support increased by 13 percent ($52.6 million to $60.75 million over the same two time periods).
- Venture funding for life sciences and healthcare companies in the 1993 to 2002 timeframe was nearly absent from the Indiana market. However, between 2003 and 2013 angel investor funding was $18.8 million and early stage funding was $59 million. To date in 2014, Indiana start-up companies have raised more than $100 million.
- Since 2003, Indiana-based sources for commercialization and venture development invested in a total of 160 emerging life science companies. These 160 firms received a total of $154 million of funding across all Indiana sources, such as from the BioCrossroads’ Seed Funds, Indiana’s Fund of Funds, the State of Indiana’s venture capital investment tax credit, and the 21st Century Fund, which collectively generated an additional $323 million, or a leverage ratio of $2.10 for every $1 of funding.
“Since our founding in 2002, BioCrossroads has pursued our first and best mission to serve as a catalyst for advancing economic opportunity through innovation across Indiana’s impressive life science sector. Our focus has been the formation and growth of new life science companies that can leverage the state’s deep and diverse life sciences research and industrial base, and set the stage for this key sector’s continuing vitality and development in the 21st century,” said David L. Johnson, president and CEO, BioCrossroads. “These numbers and the trend are certainly promising, and we’re seeing good traction, but there is still a significant gap, particularly in the early funding stages. We will continue to work with our partners to find smart, patient dollars to fill the financial needs that companies often experience during the proof-of-concept phase.”
For example, Marcadia Biotech, which was bought by Roche in 2010 for $289 million, was a recipient of the State’s funding at a critical time of its development in 2006.
“We received a $2 million 21st Century Fund grant very early in the company’s history. This funding was vital for us to get the company off the ground and produce initial proof of concept data,” said Fritz French, then chief executive officer of Marcadia and current CEO of Calibrium. “Thanks to this ‘head start,’ we were subsequently able to secure venture capital financing from prestigious firms and establish a partnership with a large pharmaceutical company.”
Not only has Indiana seen the capital market improve in actual dollars, but the State’s gains in life sciences innovation capital between 2003 and 2013 outpaced the nation.
Since 2003, many more companies have achieved growth directly from Indiana-based sources of capital, an astounding jump from five companies in the prior decade to 160 companies for the period from 2003 to 2012. Other essential commercialization measures, such as overall patent generation, venture capital, and university technology transfer, also trended positively.
Based on global market challenges, the current Indiana innovation ecosystem, and insight from Indiana stakeholders and national innovation capital experts, the report includes a set of recommendations that can be used as part of a future innovation capital strategy for Indiana, including:
- Ensuring sufficient indigenous early-stage life sciences innovation capital
- Improving the development of entrepreneurial talent
- Enhancing the commercialization of university research discoveries and technology advances through initial technology and market validation activities
- Enabling Indiana to stand out as a global leader in university-industry partnerships to advance translational research.
“The funding environment for Indiana’s life sciences sector is unique. In less than 15 years, we’ve been able to go from an almost nonexistent market to one that includes several different types of funders who have a shared determination to help these emerging companies grow here. We have an unparalleled spirit of collaboration and partnership and will continue working together to find new ways to stimulate capital for our innovative assets,” said Johnson.
Source: BioCrossroads, Inside INdiana Business