Medical Device Daily
Big dollars keep rolling in to the medical device space.
Yesterday Barrx Medical (Sunnyvale, California) reported the close of a $27.8 million Series C investment to push forward its treatment of Barrett's esophagus, with company president Greg Barrett calling the financing – rather understatedly – “very successful.”
Barrx has developed two devices, the Halo360 System and Halo90 System, to treat Barrett's – a condition considered precancerous. Barrett's is a condition of the esophagus brought on by the extended acidic insults of gastrointestinal reflux disease (GERD), and it then can become esophageal cancer (technically adenocarcinoma).
Barrx banners the Halo systems as being able to ablate the tissues characterizing Barrett's and enabling replacement by normal healthy tissue.
Barrett cites strong uptake of the Halo360 system since its commercialization in January of 2005, and the Halo90 was FDA-cleared in April (Medical Device Daily, April 27, 2006).
He said the new funding will be used in a variety of ways, among extended marketing.
“We've developed a new system” – the Halo90 – “and since we've introduced that product we've doubled our revenue and established new accounts.”
He described the Halo90 as easier to use, with a focus on treating smaller areas of Barrett's. “It can be used either primarily,” or as complementary to the Halo360, he said, “for touching up small areas of Barrett's esophagus.”
Other uses for the new funding will be to support the company's “internal manufacturing” of its disposables and the Halo90 device, and to launch a “randomized controlled dysplasia trial with 17 premier centers around the country,” Barrett said. This trial will enroll up to 120 patients with a focus on eliminating Barrett's or its reduction.
Early this year the company received a boost through publication of trial results in Surgical Endoscopy, the journal of the Society of American Gastrointestinal and Endoscopic Surgeons (Chicago), demonstrating the ability of Halo to kill precancerous cells in the esophagus without damaging healthy tissue (Medical Device Daily, Jan. 2006). The results also reported the regrowth of healthy tissues in three to four weeks in most patients. These results were followed by similar positive reports from nine studies using the Halo devices at this year's meeting of Digestive Disease Week (MDD, May 25, 2006).
Barrett said that the added financing will also support development of a second-generation generator “consistent with the Halo90 system.”
“We're pleased to receive growth capital from our current active investors and to welcome Montagu Newhall Associates to our team,” Barrett said. “Our technology has the opportunity to alter the manner in which Barrett's esophagus is treated today and in the future. This funding will help Barrx Medical respond to increasing demand from physicians and medical centers for the Halo360 and the Halo90 Systems.”
Ashton Newhall, general partner at Montagu Newhall, said: “We're excited by the opportunity to fund the growth of Barrx Medical, and believe the company has exceptional potential. Barrett's esophagus is a serious condition and we are eager to be involved in changing the landscape of its treatment.”
The Halo360 System was cleared by the FDA in 2001 and has been commercially available since January 2005.
In other financing activity:
• American Medical Systems Holdings (AMS; Minnetonka, Minnesota) reported completing its cash tender offer for the shares of Laserscope (San Jose, California). More than 21 million shares of Laserscope common stock were tendered and not withdrawn prior to offer expiration, representing about 92.97% of the fully diluted shares of Laserscope.
AMS has closed its senior secured credit facility, led by CIT Healthcare, which will be used to fund a portion of the purchase of the Laserscope shares.
AMS is a supplier of devices and procedures to cure erectile dysfunction, benign prostatic hyperplasia, incontinence, menorrhagia, prolapse and other pelvic disorders. Laserscope manufactures minimally invasive medical products, including laser systems and related energy delivery devices for the office, outpatient surgical center and hospital markets.
• ORTHOsoft (Montreal), a developer of software, instruments and computer systems to increase the accuracy of knee, hip and spine surgery, reported receiving confirmation from Le Ministere du Revenu du Quebec that its common shares qualify for the SME Growth Plan and are registered by the Autorite des Marches Financiers.
Common shares of ORTHOsoft can be purchased on the secondary market to replace qualifying shares or securities sold by an individual qualify as valid shares for a “coverage” operation in accordance with the SME Growth Stock Plan.
“[I]ndividuals now have an additional incentive for investing in the company” said Dr. Louis-Philippe Amiot, co-CEO and chairman of ORTHOsoft.
ORTHOsoft estimates that surgeons in North America and Europe perform more than one million knee and hip implant surgeries annually, and it notes predictions by orthopedic surgeons that computer-assisted surgery will become a standard of care in these procedures. It says that its computer-assisted systems have guided surgeons in more than 35,000 hip and knee surgeries in Europe and North America, and ORTHOsoft is “well positioned to become a leader in the computer-assisted orthopedic surgery market.”
FDA-cleared, ORTHOsoft's software solutions are developed by surgeons for surgeons, for easy-to-use navigation that tracks surgical flow and provides real-time data that helps to improve the surgical process and patient outcomes.