Medical Device Daily National Editor
Tough times, yes, but there's still money out there for promising technology, a fact that Paul Southworth can attest to, as president/CEO of CircuLite (Saddle Brook, New Jersey/Aachen, Germany), developer of a clever circulatory technology supporting the heart.
The company yesterday reported receiving the first tranche of what looks to become a total Series C funding package of $33 million or more. It has initially secured $10.5 million and also $23.5 million in insider commitments, with add-ons to the round expected from new investors.
The financing was led by Forbion Capital Partners and included participation by existing investors Crédit Agricole Private Equity, Foundation Medical Partners and Oxford Bioscience Partners.
The company also reported that Daniel Burkhoff, MD, PhD, chairman of the company's scientific advisory board, has been named chief medical officer of Circulite.
Southworth told Medical Device Daily that the C-round underlines investor confidence in the company's Synergy heart assist system "especially now, in these rough times" and that he was "optimistic" that "outside money" could possibly grow the round to $45 million over the next three to six months. The company's previous two rounds totaled $36 million "and change," he said.
Small in size about that of an AA battery the Synergy is a blood pump implanted in what the company describes as a "pacemaker-like" pocket, providing to long-term, partial circulatory support for those with chronic heart failure, but at an earlier point then the difficult end-stage phases of the disease.
Southworth said the company is targeting late 2009 for commercialization of its Synergy Pocket Micro-pump in Europe. C-round funding will support completion of a 25-to-30-patient registration trial with 18 registered so far for partial circulatory support in patients with Class IIB and early Class IV heart failure and the hoped-for CE marking in early 3Q09.
The company has developed sales model in which its clinical managers will work with its established clinical cites familiar with using the Synergy device rather than offering the device through a distributor. Southworth called this "a completely unique approach" because "the device sells itself" and that the model also serves to provide the most effective use of the system.
"With the CE mark on the horizon, our preparations for a targeted European launch for Synergy are well under way ... [T]he resources are now in place to grow our commercial operations ... ."
Besides looking to sales in Europe, the company plans to begin clinical evaluation of the surgical implantation via an FDA investigational device exemption pilot trial in 2010, using that data to develop the design of the pivotal trial and to support IDE approval for the pivotal trial scheduled to begin enrolment in 2011.
CircuLite then will work with the FDA to add the endosurgical system into the pivotal trial, as a second arm, when the system is available.
The difference between the surgical and endovascular approaches is how the inflow cannula is placed into the left atrium. In the surgical system, the cannula is inserted into the left atrium via a mini-thoracotomy. In the endosurgical system, the cannula is inserted into the left atrium by accesssing the left atrium transseptally from the right atrium via the subclavian vein.
Southworth said the endosurgical approach not only offers a benefit to patients but also expands the number of users because referring surgeons will be able to perform the less-invasive procedure.
Southworth praised Burkhoff's participation in the company's progress "as a champion for Synergy and for our company. His expertise in the fields of heart failure and cardiovascular medicine has been instrumental in the product's design and clinical development."
Burkhoff continues to serve as medical director of Impulse Dynamics (Orangeburg, New York) and Cheetah Medical (Portland, Oregon). He was previously director of the J. Skirball Center for Cardiovascular Research (Orangeburg), a unit of the Cardiovascular Research Foundation (New York).
In other financing news, Mindray Medical International (Shenzhen, China/Mahway, New Jersey), reported that its board has authorized an option exchange program for certain options granted under the Mindray Share Incentive Plan. The exchange, available only to eligible employees, is expected to provide additional incentive and retention value, the company said.
Participants will be able to tender vested and unvested outstanding options to purchase Class A ordinary shares of Mindray, having a price greater than $24 per share in exchange for a lower number of newly granted options. The exercise price of the new options will be the closing price of Mindray stock on the New York Stock Exchange on the exchange date.
Mindray expects the offer to expire March 15 and to grant the replacement options on March 16. The option exchange program is designed so that the current fair value of the options surrendered is similar to the fair value of the replacement options, "and any additional expenses due to the exchange offer should be minimal," Mindray said.
Mindray offers products across three segments: patient monitoring and life support products; in vitro diagnostic products; and medical imaging systems.