Smart Choice MRI, WARF, & Promega: This Week’s Wisconsin Watch List

Xconomy Wisconsin — 

A capital-fueled expansion, a nine-figure acquisition, and two end-of-year awards are among the major recent headlines from Wisconsin’s innovation community:

—Smart Choice MRI, which is based in the Milwaukee area and operates six clinics in Wisconsin that provide relatively low-cost magnetic resonance imaging services, has raised $6.5 million in new funding. Milwaukee-based F Street Capital led the round, chipping in $2.5 million. Smart Choice plans to use the money to expand into Illinois, and possibly additional states after that. In a press release announcing the round, the company said its patients pay $600 or less for an MRI. That’s significantly cheaper than the average MRI cost of $2,948, Smart Choice said in the release, citing research from the Wisconsin Hospital Association.

—Crealta Pharmaceuticals, based in the Milwaukee area, is being acquired by Dublin-based Horizon Pharma (NASDAQ: HZNP) for $510 million. Horizon’s interest in Crealta, which buys specialty pharma companies with products on the market or close to reaching it, was built around gaining access to pegloticase (Krystexxa), the only FDA-approved treatment for chronic refractory gout. Crealta acquired the rights to pegloticase at a 2013 bankruptcy auction when it purchased Bridgewater, NJ-based Savient Pharmaceuticals, which had struggled to effectively market the drug.

Chief Investment Officer magazine presented Carrie Thome, director of investments at the Wisconsin Alumni Research Foundation, with one of its 2015 industry innovation awards. WARF said in a press release that in 2005, its investment strategy shifted to all-risk parity, where the focus is more on the allocation of risk than the allocation of capital. During the decade since, the foundation has grown its portfolio to $2.7 billion, an increase of about 120 percent.

—Promega, a manufacturer of reagents and other life sciences research tools based in the Madison area, had one of its products recognized as one of the 10 best innovations of the year by The Scientist magazine. The company’s NanoLuc Binary Interaction Technology, or NanoBiT, allows investigators to study and quantify protein interactions within living cells, even when few proteins are present. NanoBiT became available for purchase in February, and a starting package costs about $1,000.

—The effort to make it easier for different companies’ electronic health records software systems to talk to each other is underway but slow-moving, leading to criticism from observers inside and outside the healthtech industry. Vendors such as Cerner (NASDAQ: CERN), Athenahealth (NASDAQ: ATHN), and Epic Systems—based in the Madison area—have started forming collectives so that the type of software used at a health system is less likely to inhibit the flow of medical data. Experts point to a more modern standard for data exchange and a nationwide patient identifier as two initiatives that could help improve “interoperability.”

—On a related note, Janesville-based Data Dimensions will continue digitizing veterans’ medical records and insurance claims for the next five years after the U.S. Department of Veterans Affairs extended the company’s subcontract. Since 2012, the VA has had Data Dimensions convert paper files through its prime contractor, Systems Made Simple, part of Lockheed Martin (NYSE: LMT). In a press release, Data Dimensions said the new deal, along with another subcontract it was awarded by SMS earlier this ear, will support the construction of a 23,000-square-foot government records storage facility beginning in early 2016.

—Engineered Propulsion Systems, a startup based in Western Wisconsin that makes airplane parts, has raised $1.4 million from investors, according to an SEC filing. According to the company’s website, it’s developing a lightweight diesel engine for general aviation that emits less carbon dioxide than competing diesel engines. Engineered Propulsion has to date raised a total of $16.2 million, according to a Milwaukee Journal Sentinel report.

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