By Nancy Crotti Trade group LifeScience Alley predicts that investments in Minnesota life science companies this year will outpace 2013, though the news is more mixed for medtech companies. Venture capital, angel investments and similar funding for Minnesota life science companies was up 65% year-over-year, to $110.5 million, during the second quarter. For the first half of the year, it's up 67%, to $185.9 million, according to St. Louis Park, MN-based LifeScience Alley, which compiled its totals from a variety of private and public reports, as well as press releases and news stories. Most companies, 71 percent, each raised less than $1 million, matching last year's results. The news is more mixed when medtech companies are specifically involved. They raised $89 million during the second quarter, more than double what they raised a year ago. But the number of companies winning funding was nearly halved, to 12. Nevertheless, the report raises a glimmer of hope for young medical device companies that face a funding environment that is still not as rosy as it was before the Great Recession. Reasons offered include the uncertainty around how the Affordable Care Act will change reimbursements for medical devices, not to mention the overall transformation of the U.S. health industry. The FDA's hard-nosed regulating also means that it could take investors years, if ever, to get a payout from a medical device startup or early-stage company. Two companies, Holaira and Inspire Medical, led the way in Minnesota, according to LifeScience Alley. Holaira, which is developing a catheter-based system to treat chronic obstructive pulmonary disease, closed on $42 million in venture financing in April. Inspire Medical landed $40 million in Series E money in May for its work on an implantable system that treats sleep apnea. On the health IT side, Minnesota- based Red Brick Health raised $7.5 million in the second quarter.
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Nancy Crotti is a contributor to Qmed and MPMN.
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