CLEVELAND, Ohio — Last year was a big one for the biomedical industry in the Midwest. In the first half of 2016, healthcare startups in the Midwest brought in a record-breaking $1.04 billion. By the end of the year, Midwest healthcare startups brought in $1.7 billion.
And Cleveland is near the top of the Midwest, according to a report from BioEnterprise, a Northeast Ohio biomedical business accelerator. Cleveland brought in $198 million dollars in biomedical investments last year, just behind Minneapolis, Chicago and St. Louis.
On a state level, Ohio ranked third in the Midwest, behind Minnesota and Illinois.
The group markets Cleveland as the “Medical Capital,” not only because of health systems such as the Cleveland Clinic and a number of research institutions, but because of the number of companies and entrepreneurial support in the area.
Read more: Midwest healthcare startups raise record-breaking $1 billion in first half of 2016
The goal is to make the biomedical industry an economic cornerstone of Northeast Ohio’s economy, Aram Nerpouni, BioEnterprise’s CEO and president, said in an interview with cleveland.com.
“We’re in the first third of our development cycle,” he said. “It took us 10 years to raise the first billion dollars and to create the first 1,000 jobs coming into these young start-ups. It only took three years to raise the last billion dollars and two years for the last thousand jobs to be created, so the rate of acceleration is there.”
Here’s what you need to know about Cleveland’s biomedical industry in 2016:
Fast facts about Northeast Ohio’s biomedical industry
- It’s grown 59 percent from 2000 to 2015, according to the Cleveland Plus Economic Review, released by Team NEO, an economic development organization.
- The largest deal in Northeast Ohio came from biopharmaceuticals. BioMotiv, a drug development company, raised $37.5 million.
- Northeast Ohio has had more than 60 exits — when a company is acquired by a global entity — since 2002, including four in 2016.
- Cleveland biomedical investments per year has decreased since 2014, as has Ohio’s. 2014 was a record year when Columbus-based Covermymeds brought in a large investment.
- The number of companies funded in Northeast Ohio has continued to increase. There are more than 700 companies.
Health information growing quickly
Northeast Ohio is known for its medical device industry. One of the fastest growing-sectors in the biomedical industry is health information technology, and Cleveland is no exception, said Annette Ballou, BioEnterprise’s vice president of strategic marketing and communications.
Health IT uses technology to process and store patient information. Examples of companies in the area are Covermymeds and Hyland Software.
Of the $198 million in funding raised, 45 percent went to medical device, 30 percent went to biotechnology and 25 percent went to health IT. Funding for health IT almost doubled, from $20 million to $50 million.
Immigration ban may hurt biotech
Immigration policies put into place by an executive order by President Donald Trump put into question how talent coming into Northeast Ohio from other countries could be affected. It’s a concern heard across all industries, said Bill Kohler, Team NEO’s CEO.
Nerpouni said attracting top level talent is key to expanding the biomedical industry. That isn’t just about immigration, although it is a factor.
“Uncertainty is never good,” he said.
A potential repeal of the Affordable Care Act could also shake up the industry, although disruption can create opportunities for companies to innovate, Nerpouni said. When the Affordable Care Act was first introduced, healthcare facilities had to adapt their software and processes, which led to new biotech work.
On a state level, Nerpouni said Gov. John Kasich’s push to add job skills to education is important. Students as early as middle school should know their options.
Creating a culture of entrepreneurship
Talent is important, as is training. So is making sure that Northeast Ohio is an attractive place for companies to grow.
Part of this is creating a culture of entrepreneurship, Kohler said. Northeast Ohio should have plentiful mentorship and learning opportunities, alongside the potential for a company to grow and succeed.
Read more from BioEnterprise’s report here.
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