Promentis Pharmaceuticals Inc., a Milwaukee company developing compounds for the treatment of schizophrenia and other central nervous system disorders, has raised $8.7 million in equity funding, according to a filing with federal securities regulators.
The funding is another in a string of venture capital investments in Wisconsin start-ups that have been disclosed in the last three weeks. During that time, Promentis and five other health-related companies have told the U.S. Securities and Exchange Commission that they’ve raised a total of nearly $30 million.
Health-related start-ups here are attracting capital for very good reasons, said Lisa Johnson, chief executive officer of BioForward, the trade organization for Wisconsin’s biotech industry.
“They don’t just attract funding because ‘oh they have a nice name,’ ” Johnson said. “It’s because they have a product or service that advances health care and investors think they’re going to get a return on their investment.”
Many of the companies are operating in an area that’s being called biohealth, which merges digital technologies, medical devices, therapeutics, diagnostics and biosciences, Johnson said.
“There’s an intersection now between these sectors, and we have a lot of companies playing in this biohealth space,” Johnson said.
The trend is pushing even the largest companies to change, she said.
“One of the key survival tactics of being disrupted is that you should be the disrupter, because if you are not on the wave you are under the wave,” said Bruce Novich during a panel discussion at the 2016 Wisconsin Biohealth Summit in Madison in late September. Novich is division president of Fujifilm North America and executive vice president and general manager of Cellular Dynamics, its Madison division that is focused on stem cells and regenerative medicine.
Fujifilm is in the process of transforming itself from a film company to a health company — and its regenerative medicine division in Madison is part of that, Johnson said.
HealthMyne is a good example of a Madison start-up operating at the intersection between digital health and therapeutics, she said. The fast-growing Madison start-up provides analytics for medical images in cancer care.
HealthMyne — which lists among its co-founders Rock Mackie, the University of Wisconsin-Madison medical physicist who developed the technology behind TomoTherapy Inc. — said in late September that it had raised $6.9 million.
Two other Madison-based digital health companies announced successful funding rounds in recent weeks. Moxe Health, a Madison software company, said it raised $5.5 million. Catalyze pulled in $6.5 million from venture capital firms.
Also, Allergy Amulet Inc., which participated in gener8tor’s winter class in Madison, raised $880,000 of equity and options or other rights, according to a filing with the SEC. Allergy Amulet is developing a portable allergen detection device that plugs into a piece of jewelry that helps users test food before eating it.
Kiio Inc. raised $927,000 of debt, according to another SEC filing. The Madison-based company’s Kiio FLEX attaches to resistance bands and helps physical therapists precisely measure and chart the amount of pressure from a patient’s exercise. Then it transfers the data to computers, smartphones and electronic medical records.
Promentis, which was founded in 2007, raised the $8.7 million from eight investors, the filing said. The company will use the money for research and development, and general corporate purposes, according to the filing. Promentis executives were not available to further discuss the funding.
Promentis has said it is developing compounds aimed at modifying brain chemistry by targeting the glutamate system, which is critical to transmitting signals in the brain. Promentis previously raised $2.9 million of venture capital in 2014.
Promentis grew out of research done by David Baker and John Mantsch, both biomedical sciences professors at Marquette University. The region has particular strength in medical devices and medical health information, anchored by GE Healthcare and Epic Systems, said Tim Keane, manager of Golden Angels Investors LLC, which has been an investor in Promentis.
“If you want to find really good wine-makers you probably go to California,” Keane said. “If you’re looking for some of the best folks in the health world, they’re here.”