Medtech fundings for August 2015 totaled $754 million, led by the $115 million IPO of Penumbra.
Below are the top fundings for the month.
|Penumbra, Inc., has filed for a $115 million initial public offering
||Micro-catheter based multi-modality device for the revascularization of an occluded vessel in the brain
|LDR Holding has raised $86.5 million in a round of funding according to press reports
||Cervical discs in spine surgery
|Mevion Medical Systems, Inc., has raised $58.84 million in a round of funding according to a regulatory filing
||Proton radiation therapy for cancer
|InVivo Therapeutics Corp. has raised $50 million in equity funding from Cowan and Company according to the company
||Biomaterial scaffold for treatment of spinal cord injury
|ReShape Medical, Inc., has raised $38 million in a Series D round of funding according to the company
||Dual balloons implanted in stomach endoscopically to create satiety in treatment for obesity
|Advanced Inhalation Therapies has filed an IPO valued up to $36 million
For the complete list of medtech fundings in August 2015, see link.
For a historical list of the individual fundings in medtech, by month, since 2009, see link.
Fundings for medical technologies in May 2015 came in at $757 million, led by the $96 million IPO of EndoChoice, Inc.
Below are the top fundings for May.
|EndoChoice, Inc., raised $96 million from a planned $115 million initial public offering according to the company
||Endoscopy imaging and instruments
|Glaukos Corp. has set terms for a $75 million (previously filed for $86 million) initial public offering according to a regulatory filing
||Device-based treatment for glaucoma
|Outset Medical, Inc., has raised $59.59 million of a planned $65.59 million round of funding according to a regulatory filing
|Shockwave Medical, Inc., has raised $40 million in a round of funding according to the company
||Balloon dilatation catheters integrated with lithotripsy for treatment of vascular and valvular lesions
|Intact Vascular, Inc., has raised $38.9 million in a Series B round of funding according to the company
||Devices for minimally invasive peripheral vascular procedures
|Autonomic Technologies, Inc., has raised $38 million in a Series D round of funding according to the company
||Microstimulator for treatment of autonomic disorders, including severe headache
|AirXpanders, Inc., has filed for a $36.5 million initial public offering according to the company
||Breast tissue expander
|AEGEA Medical, Inc., has raised $36 million in a Series C round of funding according to the company
||Connective water vapor treatment for menorrhagia (abnormal uterine bleeding)
|Ceterix Orthopedics, Inc., has secured $35 million in debt funding according to the company
||Surgical instruments and other products for treatment of soft tissue injuries
|Moximed, Inc., has raised $33 million of a planned $37.64 million round of funding according to a regulatory filing
||Extra-capsular and extra-articular knee implant for treatment of osteoarthritis
For the complete list of medtech fundings in May 2015, see link.
For a historical list of the individual fundings in medtech, by month, since 2009, see link.
Medical technology financings for the month of October stood at $202 million, marking the third month in a row that financings have declined, from a high in 2009 of $440 million in July. See financings by month for September, August and July and for 2009 trend.
We track medical technology, in our biased definition, as medical device technologies and those that are complementary or directly competitive with device technologies.
October 2009 Medtech Financings
- SyntheMed, Inc., has received $1 million funding in a private placement (anti-adhesion products and other surgical implants)
- Cardica, Inc., has raised $10.2 million in a planned $16.1 million funding round according to a regulatory filing (vascular anastomosis)
- TechniScan Medical Systems, Inc., has closed $1.1 million in a final tranche of its $6 million total Series E financing (ultrasound for breast imaging)
- Direct Flow Medical, Inc., has raised $40 million in funding according to a regulatory filing (percutaneous aortic tissue valve)
- Medical Technologies Unlimited, Inc., has received $4 million in a private investment (diagnostic technologies for assessment of musculoskeletal conditions)
- ALung, Inc., raises $2.5 million in a round of financing from existing investors (intravascular lung oxygenation device to replace/supplement hospital ventilators)
- TransEnterix, Inc., has raised $55 million in a Series B financing (single-port laparoscopic surgery platform)
- BiO2 Medical, Inc., has raised $600K in funding (vena caval filter to prevent pulmonary embolism)
- BMEYE B.V. has raised $8.8 million (€6 million) in financing in a Series B round (non-invasive finger sensor cardiovascular monitoring)
- Uptake Medical, Inc., has raised $1.2 million in financing toward a hoped-for $13.3 million round (minimally invasive technology for treating chronic lung disease)
- EndoGastric Solutions, Inc., has raised $9.5 million in bridge financing as part of a Series E round (devices for treatment of GERD)
- Cardo Medical, Inc. has raised $3 million of a planned $8 million funding round according to a regulatory filing (reconstructive orthopedic and spine surgery products)
- Denali Medical has raised $2 million in financing according to a regulatory filing (medical technology incubator)
- Cardium Therapeutics has raised $6 million from a select group of investors (biologic therapeutics and medical devices for cardiovascular and ischemic disease)
- Augmenix, Inc., has raised a $6.1 million tranche in its Series B financing round (radiation oncology polymer product)
- Embrella Cardiovascular has raised $1.6 million in Series B financing, bring the financing round total to $6.7 million (embolic protection)
- Neuros Medical has raised $1.3 million in a financing round according to a regulatory filing (neurostimulation for pain management)
- CivaTech Oncology, Inc., has raised $1 million in a Series B funding round (device for the treatment of prostate cancer)
- Vertos Medical, Inc., has raised $15.5 million in a Series D round of funding (devices for treatment of degenerative spine disease)
- ViVre Medical, Inc., has raised $1.6 million in an early stage round of funding (undisclosed medical device)
- Keraderm Corp. has closed on a $2.5 million round of investment (phototherapy technology for treatment of nail and skin infections)
- Mazor Surgical Technologies Ltd has raised $23 million in a (NIS 85.1 million) in a public offering (robotic imaging device for spine surgery)
- Patton Surgical has received $3 million from Texas' CenTex RCIC (safe laparoscopic trocar)
- Tenaxis Medical has raised $3 million according to a regulatory filing (glutaraldehyde-based sealant/hemostatic)
- Halscion, Inc., has raised $6 million in a planned $13.5 million round of funding, according to a regulatory filing (device for treatment of scars from acute surgical wounds)
Recent data from VentureSource (we noted in our post on the medtech impact) show the decline in venture capital financing in 3Q 2009.
There is, of course, a natural outcome that can be expected when there are well established medtech businesses with existing product lines (and cash flows) but seeking growth, while there simultaneously exist early stage companies with developing product lines with promising growth but in need of cash to do so. One need not be Nostradamus to recognize that deal-making would be that outcome.
In WSJ today, sourcing Dealogic, it was noted that 30% of all U.S. mergers so far in 2009 were in healthcare, compared to a typical 10%. (See some big acquisitions in a relatively recent list. See also our prediction of this back in March, 2009, in Medtech market competitor consolidation on the rise).
While one might surmise that the true result of the recession, even for the healthcare industry, is that it shifts the ownership of intellectual property to those big players with the economic fortitude to weather the recession, one cannot help but also think that there is intellectual property and market value that will be lost, not only in those startups that don't get acquired, but also in some significant share of those acquisitions that are somehow not quite able to fully actualize the ideas of the startups’ founders.
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Signs that VC investment are at a six-year low came out of a recent Dow Jones VentureSource report.
However, as one would expect, medical technology has fared better than the average for aggregate VC investment, with medtech drawing investment in recent months in excess of $400 million per month (see medtech financings by month, 2009).
There remains higher than average VC funds waiting to be invested, but VC fundraising has slowed, making those uninvested, "idle" funds that much more precious. Q4 will be an important marker of whether an event like the Dow Jones index hitting 10K is a bellwether of optimism to come, or if VC investment is too remotely related.
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Third quarter 2009 financing results from Abbott and Baxter were made public this week. Baxter’s 3Q profit rose 12%. Abbott Labs’ 3Q profit rose 37% (coming at the expense of Medtronic in a patent dispute settlement). Boston Scientific’s 2Q profit at mid-year were up 61%. Meanwhile, smaller medtech companies (see WSJ’s Turning out the Lights) have not fared so well. The facts once again reveal these truths:
- Well established medtech companies with existing product lines have demonstrated that their product lines and operations have been more than adequate to sustain them through the likely worst of the recession
- Small medtech companies, without the reserves and cashflows of big medtech, have frequently this year been unable to continue.
The Dow Jones Industrial Index crossed 10,000 this week, for the first time since 2008. Conventional wisdom has it that the index precedes changes in employment and economic recovery in general by as much as ten months.
It is difficult to accept (not understand, which is different) that there remains such an enormous gap between Wall Street and the broader economy, or that so many small companies, whose innovation is considered so vital to growing economies, do not survive long enough to do play that role.
Below is a brief profile of Adhezion Biomedical, LLC, one of the companies active in the surgical sealants and glues market and profiled in the MedMarket Diligence report #S175. We occasionally highlight companies whose products, in our opinion, are poised to make an impact on medtech markets.
Founded in 2001, Adhezion Biomedical (formerly Spartan Medical Products, LLC) is a private company developing and producing cyanoacrylate-based medical adhesives. The company’s SurgiSeal, DermaSeal, and FloraGuard products are based on the company’s proprietary OctylFlex technology and can bond skin tissue, replace sutures, staples and bandages, or be a protective barrier to prevent infection as an anti-microbial surgical sealant. The highly flexible products are biodegradable, do not require refrigeration or blending and dry quickly. SurgiSeal and FloraGuard have achieved CE Mark approval in Europe and 510(k) status in the United States. The company has received FDA approval for an OTC product in the United States.
Adhezion Biomedical received its first patent in 2003 and in 2006 received 510(k) and CE Mark approval for a consumer wound-care adhesive. In January 2008, Adhezion received 510(k) approval for the professional version of its topical wound closure adhesive and in February 2008, the company received FDA approval to begin clinical trials of this technology.
In March 2008, Adhezion Biomedical raised $3 million in a Series A financing from Originate Ventures to fund growth and product development.
See MMD report #S175.
Back in July, we looked at the medical technology industry which, like all industries, was facing the effects of a lingering recession.
While we have since seen that the recession has ended (by its pure definition being two or more quarters of decline in GDP), we know that this is not synonymous with a spike in growth or boost in employment.
Today, at Xconomy, I saw the post, "Medical Device Startups Getting Squeezed by Recession, Lawmakers, Says E&Y Report". Drawing as it does from the Ernst and Young report, it illustrates that the small companies have been hit much harder than the big ones. With established product lines and cash flow from operations, companies like Medtronic, Abbott and others have some economic immunity while startups, with their need for external financing severely crimped not only by a squeeze on VC investment but also further aggravated by VCs reducing their own funding, are feeling the effects with little shielding.
I have watched as a number of small medtech companies have either gone out of business or been acquired in whole (or just assets) by other companies. Notable examples include the dissolution of Xtent, the sale of the assets of Innovative Spinal Technologies and others. However, I have also seen companies like Haemacure which, despite the challenges of operating losses and reduced financing options, have persisted in moving products through various stages of commercial development toward market introduction.
The severity of the recession has guaranteed that, even for medtech companies, the effects will also persist. As we also noted previously, the continued disparity between established companies with positive cashflows and early stage companies with limited financing options may well lead to a flurry of acquisitions, but as yet, that trend has yet to show much substance.
With medtech investments in July and August each at over $400 million, I had hopes (expectations?) that September would continue the trend, but through Sept. 30, medtech financings for the month totaled "only" $328 million. Of course, this is still a healthy amount, especially considering that September investment tends to be lower on a relative basis anyway.
September 2009 Medtech Financings:
- Endosense, Inc., has raised $36 million in a Series B financing (catheter ablation of cardiac arrhythmias)
- Athena Feminine Technologies has raised $2 million in a Series A financing (pelvic floor electrical stimulation for treatment of urinary incontinence)
- ValenTx, Inc., has raised $22 million in Series B financing (minimally invasive treatment of obesity)
- LifeWave Hi-Tech Medical Devices Ltd has raised $1.5 million in a secondary offering (electrical stimulation device for chronic wound treatment)
- Uptake Medical, Inc., has raised $3.4 million of a planned $13.4 million financing according to a regulatory filing (broncoscopic catheters for treatment of emphysema and chronic obstructive pulmonary disease)
- Nuveta, Inc., has raised $800K in a Series A financing (in vitro fertilization technologies)
- Virtual Ports, Ltd., has raised $2.6 million in early stage financing (developing surgical endoscopy technology)
- Pervasis Therapeutics, Inc., has raised $17 million in a Series C financing (Vascugel, a product derived from tissue-engineered allogeneic endothelium for enhancing blood vessel repair)
- Calypso Medical Technologies, Inc., has raised $50 million in venture capital financing (tumor localization technology for use during external beam radiation therapy)
- Update Medical, Inc., has raised $3.4 million of a planned $13.3 million financing (bronchoscopic lung volume reduction treatment for COPD)
- NewCardio, Inc., has raised $2.9 million in a private placement (platform technology for improvement in 12-lead EKG)
- Spinal Kinetics, Inc., has raised $5.3 million in a financing round (artifical discs for treatment of spinal injuries and degenerative disc disease)
- Gamma Medica-Ideas, Inc., has raised $24 million in its institutional investor financing round (digital molecular imaging system for detection of cancer)
- Micell Technologies, Inc., has received a $15 million investment from St. Jude Medical (drug-coated stents designed to be less thrombogenic)
- Monteris Medical, Inc., has raised $2 million of a planned $3.5 million round of financing (tumor ablation applicable to brain)
- Ionix Medical, Inc. (formerly OncoStim), has raised $18.3 million in financing according to a regulatory filing (minimally invasive device for treatment of BPH and prostate cancer)
- Sleep Solutions, Inc., has raised $20 million according to a regulatory filing (sound analysis technology for in-home monitoring of sleep-disordered breathing)
- MedShape Solutions, Inc., announced that it had closed $10 million in equity funding (memory shape device technologies in orthopedics)
- Zogenix, Inc., closes $51 million Series B funding (needlefree subcutaneous drug delivery system)
- Urodynamix Technologies Ltd raises $1.5 million in private placement (near infrared spectroscopy in diagnosis and treatment of urinary incontinence)
- Spartek Medical, Inc., has raised $3.2 million in financing according to a regulatory filing (minimally invasive treatment of degenerative disc disease)
- ActiViews Ltd has raised $5 million in a financing round (optical guidance in CT, fluoroscopy and MRI for oncology diagnosis)
- ThermalTherapeutic Systems, Inc., has raised $2.75 million in a new round of funding (portable device to heat and circulate sterile fluids)
- Blue Belt Technologies, Inc., has raised $2.4 million in a Series A round of funding (surgical instruments in orthopedics and neurosurgery)
- Inspired Surgical Technologies, Inc., has raised $1 million in financing according to a regulatory filing (photonic based surgical technologies platform)
- Satiety, Inc., has raised $25.3 million of a planned $33 million round of financing (obesity device)
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