Raymond Cohen is well aware that a $32.6 million Series A round is not very common in the med-tech industry. But it helps if the company's management already has a strong track record in the industry and a positive history with the lead investors.

Axonics Modulation Technologies (Irvine, California) has completed a $32.6 million Series A preferred stock financing to accelerate product development in the implantable neuromodulation space. The company holds an exclusive license for its miniaturized implantable neuromodulation technology from The Alfred Mann Foundation (AMF; Valencia, California). The company is initially targeting indications for chronic pain and overactive bladder.

Cohen told Medical Device Daily that he has been lucky in the sense that back in 2012 he was CEO of a little company known as Vessix Vascular (Laguna Hills, California) that was acquired by Boston Scientific (Natick, Massachusetts) in a deal worth up to $425 million.

Given that the founders of Axonics include the former senior management team of Vessix, investors likely are more confident betting on the management of the company because of Cohen and his team's track record. Cohen noted that the two largest investors in this round were also the two largest investors in Vessix so the firms already have an established relationship with the Axonics team. Also playing in Axonics' favor is the fact that the company's core technology came out of the AMF, a research organization that is well known and respected across the industry.

The Axonics technology product platform leverages decades of implantable device experience and related intellectual property from AMF, the firm noted.

Edmond de Rothschild Investment Partners (EdRIP) of Paris was the lead investor for the financing round. Also participating in the financing were Geneva-based NeoMed Management; Beijing-based Legend Capital, a venture capital arm of Legend Holdings; and a select group of private individuals. Raphaƫl Wisniewski of EdRIP, Erik Amble of NeoMed and Darren Cai of Legend have been appointed to the Axonics board.

Proceeds from the financing will provide working capital to accelerate product development and fund a series of multi-center clinical studies to establish safety and efficacy of the company's patented neuromodulation system. In conjunction with the financing, Axonics established a European subsidiary to support planned European clinical studies and a commercial product launch.

Cohen said the company expects to begin human clinical trials in about a year. "We would like to see our first clinical study actually be done on three continents, the U.S., Europe, and China, simultaneously," he said.

The plan, Cohen said, is for the first study, which will not be randomized, to lead to a CE mark in Europe, followed by a randomized study that would support FDA approval to bring the device to the U.S.

"We are encouraged that this group of world class investors recognizes the quality work done to date by AMF and the opportunity being created by the proven team of engineers and executives now in place at Axonics," Cohen said. "We truly have the potential to take that technology foundation and rapidly commercialize a next-generation implantable neuromodulation platform to treat chronic pain via spinal cord stimulation and peripheral nerve applications."

According to Axonics, neuromodulation is one of the largest and fastest growing segments of the worldwide medical device market. Although spinal cord stimulator devices have been around for more than 40 years, the field of neuromodulation is still in its relative infancy, the firm noted. Worldwide revenues are expected to triple, reaching $6 billion by 2020. Axonics noted that the spinal cord stimulation segment, implantable devices designed to treat chronic pain, currently accounts for more than 60% of the worldwide neurostimulation market. It's also estimated that about 20% of adult Americans experience chronic pain, equating to more than 60 million people.

Cohen said Axonics' product represents a next-generation device. While the neuromodulation space was created by the big guys in the industry, including Medtronic (Minneapolis), Boston Scientific, and St. Jude (St. Paul, Minnesota), Cohen says existing devices are lacking in terms of patient comfort and user-friendliness. "Right now these companies have done a nice job of creating the market but as is typical, there's room for innovation, and that's what we intend to do," he said.