INDIANAPOLIS (AP) - A five-year funding drought is forcing Indiana life-sciences companies to turn to partners or find other creative strategies to keep their technologies moving forward.
Indiana life sciences firms raised $21 million in the first nine months of 2013, the lowest level since 2003, the Indianapolis Business Journal reported (https://bit.ly/K2Uuco ). Nationally, venture capital investments in life sciences firms totaled $4.9 billion for the same period, down 30 percent from 2008, according to data from Thomson Reuters and PricewaterhouseCoopers.
“We couldn’t have timed this worse from a capital markets perspective,” said FAST BioMedical CEO Joe Muldoon, who’s hoping to raise $25 million in venture capital this year and next. “The bar has gotten so high on life sciences to get funding. It’s almost impossible to describe how much the environment has changed.”
The slowdown in life sciences funding has increased the time it takes to get a product to market and become profitable, said David Mann, managing director of Carmel-based venture capital firm Spring Mill Venture Partners.
“The timelines in venture capital have extended, and we’re no exception,” Mann said.
It’s also left many startup companies struggling to find the money to move forward.
“It’s easier to raise $20 million now than it is to raise two,” said Kristin Jones, executive director of the Indiana Health Industry Forum.
Many companies are seeking partners to help keep things moving.
EndGenitor Technologies Inc., which is using stem cells to develop new therapies, has been funded by Bloomington-based Cook Group Inc.
West Lafayette-based Endocyte raised more than $90 million in venture capital and another $145 million through public stock offerings. But it still turned to New Jersey-based drug giant Merck & Co. for $58 million to help get its ovarian cancer drug vintafolide ready for launch.
Company executives say the picture is improving. ImmuneWorks CEO Wade Lange noted that more than 40 percent of initial public offerings in 2013 were life sciences companies. That signals investors have more cash.
“Certainly the attitude is better, now, more positive than it was a couple years ago,” Lange said.
But David Johnson, CEO of life sciences development group BioCrossroads, said a turnaround won’t be quick.
“The environment remains challenging and for the foreseeable future looks like it will. It’s really the survival of only the very fittest and heartiest souls,” he said.
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Information from: Indianapolis Business Journal, https://www.ibj.com
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