A Medical Device Daily
InnerPulse (Research Triangle Park, North Carolina) a company developing a new kind of defibrillator, laid off about one-third of its employees after suffering a setback in early testing of its product.
The job cuts, which happened in June, are designed to conserve cash until a team of engineers rebuilds the defibrillator's faulty part, said Dan Pelak, who took the unusual step of giving up his job as InnerPulse's CEO in the face of the problems but remains president of the company.
"We don't need a CEO now," Pelak told the Raleigh News & Observer. "We need to get this resolved, and then we'll add the people back."
Eighteen positions were eliminated, including those of executives overseeing finances, regulatory affairs and marketing.
The company, which has received more than $85 million in venture capital since its founding in 2003 and incubation by Synecor, has more than half of its cash left. It raised a staggering $50 million (for a private med-tech round) in its last round, a Series C, in January 2007 (Medical Device Daily, Jan. 30, 2007).
The team of 32 engineers remaining at InnerPulse is led by Steve Mason, the biomedical engineer who designed the company's defibrillator and remains its chief technical officer.
Glitches are almost inherent with new technology, and InnerPulse's defibrillator, dubbed the Percutaneous Implantable Cardioverter Defibrillator, is a radical new idea. It is long and skinny like a snake and is implanted through a large blood vessel in the groin.
Traditional ICDs are designed to jolt a malfunctioning heart back into a rhythmic beat, but many people don't get them because the current ones, shaped like hockey pucks, are uncomfortable and require surgery and anesthesia to implant them under the skin below the shoulder.
If successful, the snakelike design of InnerPulse's version promises to be easier to implant, less likely to cause infection and much more comfortable for patients. The procedure could be performed in 10 minutes by specialists, at the same point of entry that's used to insert stents that keep arteries from clogging and balloon catheters that clean clogged arteries.
The design also posed some potential problems, Pelak said, but "much of the complicated parts work."
The part that didn't was supposed to be simple, he said.
Wires that attach the snake to the heart muscle, called leads, were too difficult to put in place and then came loose when the company tested the defibrillator in animals, he said.
Over the next 12 to 18 months, the engineering group will redesign and rebuild the leads and then test them, Pelak told the News & Observer.
The company has had a powerful syndicate of investors including Johnson & Johnson Development Corporation (New Brunswick, New Jersey), Medtronic (Minneapolis) Synergy Life Science Partners, Ascent Biomedical Ventures, Delphi Ventures and Frazier Healthcare Ventures in its C round back in 2007. Additionally Boston Scientific (Natick, Massachusetts) and Greatbatch (Clarence, New York) have in the recent past also been significant stockholders of InnerPulse.