Nephros Therapeutics Inc. raised $17 million in a Series C financing for its Renal Assist Device and, sounding like a sports team, attributed its success to excelling at the basics.
"It is a difficult financing environment," acknowledged Richard Andrews, CEO and president of Nephros, but he added: "It all comes back to fundamentals. The things that make the difference are quality clinical results, strong proprietary positions, creation of a team that can execute and a very tight focus on product development."
Lincoln, R.I.-based Nephros' lead product is its Renal Assist Device - a cellular replacement therapy system that uses its Renal Proximal Tubule cell technology for the treatment of acute renal failure patients. It is designed to be used in intensive care units.
"The kidney has two functions," Andrews told BioWorld Today. "One is filtration, done by the glomerulus - that is the function that is replaced by the filtration of dialysis. The second function is the management of the neurocrine metabolic function."
The RAD provides dual aspects, similar to the kidney itself. "We create a bioartificial nephron, or kidney," Andrews said. "We provide two filters. The first is a conventional filter for the glomerulus function."
The Renal Proximal Tubule cell technology in the device is the second filter. It recovers essential non-waste blood products from the passing filtrate and returns them to the circulation, as well as produces vitamins or vitamin precursors that are released into circulation. Also, RPT cells produce soluble molecules needed for volume control and blood pressure regulation. And the cells sense infectious and inflammatory components and then release cytokines to communicate with the body's host defense system, Nephros said.
Privately held Nephros, spun out of the University of Michigan, has 44 employees. The money will be used for clinical operations, Andrews said. The device is in physician-sponsored Phase I/II trials now, and the company expects to conduct Phase II trials in acute renal failure patients in 2003. The company is planning to do an additional funding round in the first quarter of 2004, Andrews said.
Lurie Investments, of Chicago, led the round. New investors CDP Capital, of Montreal, and Foster & Foster, of Greenwich, Conn., also participated. Existing investors participating were BD Ventures, Portage Venture Partners, North Coast Technology Investors, Palermo Group and Seaflower Ventures.
"We are just excited to be doing what we are doing," Andrews said, when considering the successful financing round. "And we are excited about the support we've had with the new investors. It's nice to put this together."