PARIS – Paris-based Mauna Kea Technologies SA, inventor of Cellvizio, the multidisciplinary confocal laser endomicroscopy platform, received an initial tranche of $13 million from the European Investment Bank (EIB).
"This initial tranche, for which both principal and interest at 5% are payable, is particularly suitable financing for our development phase. It really improves our cash flow for the next five years," Christophe Lamboeuf, chief financial officer and deputy managing director at Mauna Kea, told BioWorld MedTech.
Following this transaction, the company has $10 million available. It also believes it has enough cash to finance its activities over the next 12 months. Two further tranches – one of $6.6 million and another of $5.5 million – will be advanced at a later date under a finance agreement totaling $25 million. These two next tranches will be released on the condition that certain milestones are reached, including the company's commercial progress and future equity capital financing activity.
The loan agreement is secured and is supplemented by an agreement to issue share certificates to the EIB for the first two tranches of finance, covering 1,450,000 and 300,000 shares, respectively (5.75% and 1.2% of the current share capital).
EU supports Cellvizio technology
"This technology is fully in line with the mandate given to the EIB by its shareholders – the EU member states – to support innovation throughout Europe," stressed EIB Vice President Ambroise Fayolle.
To that end, Cellvizio is capable of producing microscopic images from inside the body, at a rate of 12 frames per second. The images are obtained by pressing the Cellvizio miniprobe against the mucous membrane wall or target organ. This minimally invasive procedure, a kind of optical biopsy, avoids using the traditional method of blind biopsy sampling, consisting of removing tissue from patients and examining it under a microscope, sometimes several days later.
Stock price soars
The French health care insurance authorities recently agreed to approve reimbursement for Barrett's esophagus endomicroscopy procedures in that country. "It would have needed nine years to complete the clinical evaluation report," said Robert Gershon, CEO of Mauna Kea. The rates approved in France are $168 for endoscopy procedures and $77 for anesthesia. Mauna Kea has identified more than 45,000 esophagogastroduodenoscopies in France that could be performed each year using Cellvizio.
"This decision confirms the relevance of our technology for patients at risk of esophageal cancer," said Gershon. With this support, Mauna Kea will be able to speed up adoption of its medical technology in its home market.
Following this announcement, the company's share price on the NYSE Euronext exchange jumped 41%. The company now intends to expand its conquest of the reimbursement market in other European countries. The margin is high because the Cellvizio platform currently is reimbursed in only two other European countries: Croatia and Germany.
U.S. growth strategy fueled by PPU program
In the U.S., Mauna Kea is homing in on a large and growing gastrointestinal market opportunity with a pay-per-use (PPU) program. Placement of the Cellvizio system under a PPU contract generated sales growth for consumables up 96% in the first quarter, compared with the prior-year period. Moving forward, sales of consumables will exceed revenues from selling complete Cellvizio systems. To that end, Gershon has strengthened and expanded the sales and marketing team, with a chief marketing officer and a new vice president of sales.
Cellvizio has been approved in more than 40 countries across North America, Europe and Asia. "We are driving revenue growth in very targeted markets outside the U.S., including China and the [EU]," said Gershon. In addition, it has identified the interventional pulmonology market as the new clinical indication for the next commercial focus area and growth driver.