Medical Device Daily
Kicking off the initial public offering (IPO) festivites in medical technology for the new year, CardioMEMS (Atlanta), a startup company developing medical devices for use in monitoring heart patients, reported that it is seeking to raise more than $86 million, with all of the shares in the proposed offering are being sold by the company.
The underwriters of the offering will be Banc of America Securities as sole book-running manager, CIBC World Markets as co-lead manager, and Jefferies & Company and Pacific Growth Equities as co-managers.
The company hopes to trade on the NASDAQ under the symbol SENS.
The company’s first commercial device, the EndoSure Wireless AAA pressure measurement system — or EndoSure system — is comprised of an implanted sensor and an external electronics module. The sensor is inserted during the minimally invasive cardiovascular repair of abdominal aortic aneurysms (AAA), via a catheter into a patient’s aneurysm sac to measure and communicate pressure information to an external electronics module from inside the sac.
Since a goal of the endovascular AAA repair procedure is to eliminate or minimize pressure on the walls of the sac, the company believes the EndoSure sensor is a valuable tool in helping a physician to determine during the procedure if the AAA has been adequately repaired.
The EndoSure system was cleared by the FDA in October 2005 for measuring intrasac pressure during endovascular AAA repair and is used alongside traditional angiography.
The FDA clearance, however, does not allow the company to promote the EndoSure system as a replacement for traditional angiography or for measuring pressure after the procedure. The company said it plans on conducting clinical trials to seek FDA clearance for measuring pressure after the procedure.
CardioMEMS said it is adapting the EndoSure system for use in patients with heart failure and in patients with hypertension. The heart failure and hypertension sensors are further miniaturized versions of the EndoSure sensor that use the same materials, manufacturing methods and operational concepts as the EndoSure AAA sensor.
The IPO offering comes after a strong close for 2006 for the company. In November, CardioMEMS closed on $22.6 million in venture capital. Nearly half the total came from Arcapita Ventures. The company, which is based at the Georgia Tech Advanced Technology Development Center (Atlanta), reports that it has raised more than $50 million in venture capital since its 2001 launch.
In December, the company said that two of its wireless sensors for monitoring hearts had been successfully implanted in two human patients.
In November 2005, the company entered into a license and development agreement with Medtronic (Minneapolis) as well as a related supply agreement, to adapt the sensor technology for use as a wired pressure sensor system capable of working with Medtronic’s implantable devices to address impaired cardiac function, hypertension, or both.
Medtronic is funding the efforts under this joint development program through a series of milestone payments totaling $3 million. CardioMEMS also is entitled to receive royalties on sales of Medtronic devices incorporating its technology, subject to the terms of the license agreement including a cumulative royalty cap of $25 million. Medtronic is a 15.1% stakeholder in the company.
Endosure noted that it has incurred net losses in each year since its inception in 2000, including losses of $3.3 million in 2003, $5.1 million in 2004, $8.8 million in 2005 and $13.3 million in the nine months ended Sept. 30, 2006.
In other financing news: Allied Minds (Boston), a pre-seed investment firm specializing in early-stage university business ventures, has teamed with Washington University (St. Louis) to form Cephalogics, an optical imaging company.
Cephalogics will develop a new high-density diffuse optical tomography system specifically geared for use in assessing the functional status of the brains of infants during treatment in neonatal intensive care units.
Allied Minds initially is investing $500,000 to develop a prototype and begin preliminary testing. More funding will follow as the technology progresses.
Compared to infants born full term, premature infants are particularly vulnerable to developing brain-related disabilities. Early detection of altered brain development and function is important for the care of preterm infants.
“If clinical testing proves our estimation of effectiveness, the new brain imaging system will aid in therapy and care of neonates in intensive care by indicating which areas of the brain are injured and by monitoring the brain’s response to interventions,” said inventor Joseph Culver, PhD, an assistant professor of radiology at the Washington University’s school of medicine. Culver’s group has been working on the technology at Washington University for three years.
Diffuse optical tomography is a new computational imaging approach that uses multiple light sources and detectors to create an image from light diffusion. The technology is noninvasive, mobile for easy bedside imaging and can continuously monitor brain blood volume and oxygenation.
“It has the potential to fill a ‘functional’ gap in the neurologic imaging repertoire currently available to neonatal clinicians,” Culver said.