Coming off record fundraising year, Indiana’s life science sector looks for even more capital in 2023


April 28, 2023 | John Russell

Indiana life sciences sector raked in a record $619.8 million in venture funding last year as a growing number of startup companies were able to sell their stories to investors.

Now the industry is looking for ways to increase that figure, especially for inventors and entrepreneurs who don’t have a track record, a panel of experts said Friday morning at IBJ’s Life Sciences Power Breakfast.

“The number is better. It could be a lot better,” said Richard DiMarchi, a chemistry professor at Indiana University who has co-founded six biotech companies. “For those who are doing it for the first time without established credentials, it can be near impossible.”

DiMarchi’s latest company, Carmel-based MBX Biosciences, raised $115 million last year to help it advance the development of therapeutics to treat rare endocrine disorders. That amount is one of the largest in recent years for an Indiana-based science startup.

“Relationships matter, right?” DiMarchi said. “To have access to people who have those deep pockets, personal reputations of having proven that you can do what you set out to do previously, that’s incredibly important. If you can do that, investors will go wherever they need to go to put money to work because their job is to make money.”

Jim Pearson, CEO of Carmel-based NICO Corp., which is developing minimally invasive tools for brain surgery, said promising ideas and healthy markets are key for raising money.

“The truth is, it’s usually the idea,” said Pearson, who has raised $62 million in recent years to help fund clinical trials and training sessions for neurosurgeons. “ … If you had a cure for cancer, you will get money no matter what state you’re in. And the point is, it’s usually the presenter or the idea that drives the  investment.”

Melina Kennedy, CEO of Central Indiana Corporate Partnership, a group that tries to expand Indiana’s economy by concentrating on specific industry sectors, said the players in the life sciences community should always strive to make connections in order to find funding.

“I think we should always pause to celebrate a record year,” she said. “But we need to keep striving for more. We need to also make sure that we’re kind of promoting the innovation all the way through the entire continuum from the start all the way to the end manufacturers, suppliers, etc. And connecting people even outside of Indiana to capitalize on opportunities, because it won’t only be here.”

Cory Lewis, CEO of Fishers-base INCOG Biopharma Services, a contract drug manufacturer, said companies that take smart risks can often find money, but risk-averse companies will have a harder time.

“In the state of Indiana, generally speaking, your humble group of individuals are pretty modest. We’re not big risk takers,” said Lewis, who has built a $100 million manufacturing plant that is in the startup phase. “…So I would challenge us first, how do we take more risks as a city? How do we take more risks as residents of the state? If you have a good idea, if you have a track record, the capital will follow.”

Dawn Brooks, global development leader for several Alzheimer’s disease compounds at Eli Lilly and Co., said partnership between large and small players is often the key to success.

The Indianapolis-based drugmaker, which has launched 19 drugs since 2014, is increasingly looking for partners to help it develop and manufacture new medicines, she said. That means plenty of opportunities for smaller companies looking for a big partner.

“Often you need to partner,” she said. “And you partner either to scale to allow you to deliver the opportunities that you have in front of you, or you partner to ultimately have access and build on innovation.”

Venture capital is a critical source of funding for early-stage and mid-stage companies that are too young or too untested to go public or merge with a larger company. It’s seen as a key indicator of a sector’s health and potential growth.

The amount raised last year is roughly 43% larger than the previous record of $433 million, set in 2021, according to BioCrossroads, an Indianapolis-based group that promotes and invests in the state’s life-sciences sector and tracks the funding.

Thirty-seven companies signed 40 deals last year for venture funding, for an average deal amount of $15.5 million.  That is an improvement from the year before, when 39 companies signed deals worth an average amount of $11.1 million.

Last year’s deal sizes ranged from $100,000 to $124 million. The wide range of funding amounts often reflects that some companies are further along in their research and development, and need huge sums to advance their experimental products or services.



    We would love to hear from you.

    Let’s work together.

    INCOG BioPharma Services
    12050 Exit 5 Parkway
    Fishers, IN 46037