5 digital health startups you need to watch in 2019

(Image from Unsplash)

Funding for digital health companies continues to rise, with 2018 the biggest year so far this decade, according to healthcare investment firm StartUp Health. Investors took a greater interest in machine learning, blockchain and artificial intelligence (AI).

Digital health funding was 14 times greater than it was eight years ago, when New York-based StartUp Health began tracking these investments. From 2017 to 2018, the average deal size grew by $6 million. Machine learning companies cut 66 deals to raise $940 million, an 80% increase in funding compared to 2017. Patient empowerment received the most funding of any function in 2018, $3 billion across 193 deals.

Here are five of the up-and-coming digital health companies to watch in 2019:

Get the full story on our sister site, Medical Design & Outsourcing.

Silk Road Medical clears $109m in IPO

Silk Road MedicalSilk Road Medical (NSDQ:SILK) said yesterday that it cleared just more than $109 million in its initial public offering, including a fully subscribed underwriters option.

The $20-per-share flotation grossed $120 million, Sunnyvale, Calif.-based Silk Road said. The company is developing a neuroprotection and stent system called Enroute as an aid to transcarotid artery revascularization procedures. Silk Road’s estimated net proceeds of $109.1 million are earmarked for sales force expansion, new clinical trials, increasing its international footprint and potentially for acquisitions.

president & CEO Erica Rogers told MassDevice.com last week that Enroute is designed to be a less-invasive alternative to carotid endarterectomy. It’s engineered to temporarily reverse blood flow during shunting to prevent debris from entering the brain, Rogers told us.

In their first day of trading April 4, SILK shares gained 80.9% on the IPO price, opening at $33.15 apiece and rising as high as $39.51 before closing at $36.18 each. The stock closed down -2.3% at $34.99 per share yesterday.

Irish medtech startup wins $3M in grants

The BioHealx technology is designed to treat anal fistula. (Image from Signum Surgical)

Galway, Ireland-based startup Signum Surgical said today that it has landed more than $3 million in grants to help fund its efforts to gain U.S. and European regulatory clearance of a device intended to treat a condition that can cause fecal incontinence.

The grants include $2.04 million from the European Union Horizon 2020 SME Instrument and $1.15 million from Ireland’s Disruptive Technologies Innovation Fund (DTIF). Part of the money will help Signum Surgical launch of a 12-month clinical study of its BioHealx device, which is designed to treat anal fistula. An anal fistula is an artificial tunnel between the rectum and skin of the buttocks that can develop due to an infected or blocked anal gland. If left untreated, an abscess may form, and the infection may travel through the patient’s sphincter muscle. The condition primarily affects young men and up to one in 5,000 people worldwide, according to a 2011 study published in Deutsches Ärzteblatt International. 

Current treatments are rarely successful, leaving patients to suffer from ongoing infections and causing many to undergo multiple procedures, according to the company. The BioHealx technology includes a bioabsorbable implant designed to help seal the fistula tract and dissolve in the body after treatment. The implant is placed via a minimally invasive, outpatient procedure designed to encourage healing, prevent reinfection, and protect patient continence, the company said.

The new grants follow a $2.3 million Series A investment round that closed in 2016. The Series A round was led by Halo Business Angel Network’s MedTech Syndicate, with additional investments from Enterprise Ireland, the Western Development Commission, Rising Tide Europe, and other angel investors.

“We are delighted to be awarded both the DTIF and Horizon 2020 SME grants, which validate the need for a viable solution where other approaches have been unsuccessful in treating this patient population,” said Signum Surgical co-founder and chief technology officer Eoin Bambury in a prepared statement. “With this funding, we look forward to accelerating the commercialization of BioHealx technology to help alleviate the suffering of people with anal fistulas — a debilitating condition that severely affects patients’ quality of life.”

Varian leads $54m Series C for HistoSonics

HistoSonicsHistoSonics said today that it closed a $54 million Series C round led by Varian Medical (NYSE:VAR) that included a contribution from Johnson & Johnson (NYSE:JNJ).

The Ann Arbor, Mich.-based company, which is developing an image-guided, robotically assisted platform using non-invasive and non-thermal technologies, said Lumira Ventures, Venture Investors, the State of Wisconsin Investment Board and existing backers also participated – including robot-assisted surgery pioneer Dr. Fred Moll.

HistoSonics said it plans to use the proceeds to complete “key regulatory and commercial milestones” and expand its development efforts.

“We are very excited to be adding this group of experienced investment partners who share in our vision and mission,” president & CEO Mike Blue said in prepared remarks. “[Robotically assisted sonic therapy] will offer transformative change for both patients and physicians and will help overcome many of the major limitations and side effects of today’s cancer therapies. It has also shown great promise to work synergistically with other therapies and platforms, such as drug and immunotherapy, a big focus of our preclinical work, as well as with other surgical robotic platforms. We are confident that RAST will provide an entirely new experience for patients and physicians, as well as a more cost-effective alternative that better aligns with value-based healthcare initiatives, and we are thrilled to have such a strong syndicate joining us on this journey.”

“We believe that the HistoSonics platform offers a unique solution and significant promise to treat patients with a number of different diseases across global markets and care settings,” added Varian strategy & business development VP Greg Sorensen, who is slated to join the HistoSonics board in connection with the Series C round.

“Venture Investors has been an investor in HistoSonics from the start and it is incredibly exciting to see the progress we have made over the past several years,” Venture Investors chairman & managing partner Jim Adox said. “The vision of the company from the very beginning has been to develop a true platform that will revolutionize how patients are treated across a broad spectrum of diseases, including some of the most significant cancers, and it is very gratifying to now see the tremendous advancement of the system as it nears market launch.”

HistoSonics said Lumira managing director Gerry Brunk and a representative from Johnson & Johnson Innovation are also slated to join its board.

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TransMedics registers for $86m IPO

TransMedicsTransMedics last week registered for an initial public offering worth more than $86 million for the organ transplant transportation system it developed.

The Organ Care System is designed to keep donated hearts, lungs and livers in near-living condition until transplantation; the company touts it as the only such system designed for more than one organ.

In Europe, the OCS Heart and OCS Lung devices are already on the market. A year ago the Andover, Mass.-based company won pre-market approval from the FDA for its OCS Lung transplant device for standard double-lung transplantation procedures.

In an April 5 regulatory filing TransMedics said it aims to raise as much as $86.3 million in the IPO, but didn’t detail the number of shares it plans to float or their potential price. It plans trade the stock on the NASDAQ exchange under the “TMDX” symbol.

TransMedics said it expects the FDA action over the next 18 months on the other PMAs it’s submitted, including one filed last August for unused donor lungs and another filed in December 2018 for currently utilized and un-utilized hearts donated after brain death.

In the U.S. the OCS devices are reimbursed using existing billing codes, with Medicare and private payors covering their use in pivotal trials of all three organs and for OCS Lung after last year’s approval.

“We believe these established channels will continue to facilitate commercial reimbursement for the OCS Lung and, if they are approved by the FDA, for the OCS Heart and OCS Liver. We are also in the process of seeking long-term reimbursement for our products outside of the United States,” TransMedics said in the filing.

The company said it put up sales of $13.0 million last year, up 68.8% compared with 2017.

In a separate release, TransMedics issued final results from its OCS Heart Expand study of already-donated hearts that might go unused. Presented last week at the annual meeting of the International Society for Heart & Lung Transplantation, the study showed a successful transplant rate of 81% and a patient survival rate of 95% at 30 days.

“We used donor hearts that would often have been wasted because of the inability to assess their viability using conventional cold storage. The OCS Heart also enabled investigators to travel longer distances to retrieve donor hearts to help more of our patients on the waiting list for a heart transplant,” said Dr. Jacob Schroder, of the Duke University Hospital, who presented the trial results, said in prepared remarks.

“These results have the potential to significantly expand the number of viable donor hearts for transplantation to help patients in need,” added TransMedics CEO Dr. Waleed Hassanein. “We are grateful for the dedication and commitment of the OCS Heart Expand trial investigators and, most importantly, we would like to thank the heart transplant patients who participated in the trial.”

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Brainsway sets terms for $30m IPO

Brainsway

Brainsway this week set the terms on its forthcoming initial public offering in the U.S., saying it hopes to raise nearly $30 million.

The Jerusalem-based company, which developed a transcranial magnetic stimulation device to treat psychological disorders, said it plans to float 2.5 million American Depository shares at roughly $11.94 apiece. Each ADS is slated to represent two ordinary shares, Brainsway said; the U.S. offering price is based on the April 2 closing price of ₪21.64, or roughly $5.97, and is subject to change.

The company plans to list on the NASDAQ exchange under the symbol “BWAY,” according to a regulatory filing.

Last August, Brainsway won FDA de novo approval for its deep transcranial magnetic stimulation system with indications for treating obsessive compulsive disorder.

BRIN shares closed down -4.8% at ₪20.22 yesterday in Tel Aviv.

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Loop Medical lands $3.2M grant for blood collection device

Loop Medical said today that it has received a $3.2 million grant from the Bill & Melinda Gates Foundation to support pre-production and clinical trials required for the global registration of its blood collection device. The foundation had previously given the company a $400,000 grant.

Based at the Swiss Institute of Technology (EPFL) in Lausanne, Switzerland, Loop Medical designed the device to be painless, easy-to-use and able to collect samples that are large enough for common high-throughput blood analyzers. The device was also designed to improve safety, particularly in countries with low medical resources.

In the standard venipuncture procedure, a long needle is used to collect blood from the vein. Loop accesses blood in capillaries that are just below the skin, through a minimally invasive and painless manner, according to its website.

Loop has been working with clinical pathology and histocytopathology company Cerba HealthCare since 2017 to design a device that can be fully integrated into existing centralized laboratories’ infrastructures and processes. The device targets clinical pathology laboratories, clinics, pharmacies, physician offices and patients at home. The technology addresses the need to empower patients, communities and healthcare professionals through a safe and effortless solution in a highly commoditized blood collection market under significant price pressure, according to Loop.

“We are thrilled to have received this second grant from the Bill & Melinda Gates Foundation. It shows trust in our project and is a recognition that our early development activities are well managed,” said Loop Medical founder & CEO Arthur Queval in a prepared statement. “We are convinced our painless and easy-to-use device is a major breakthrough. It will benefit both the blood collection procedure itself and the safety and convenience of the end-to-end diagnostic process for a variety of health conditions and geographies around the world.”

Silk Road Medical upsizes IPO

Silk Road MedicalSilk Road Medical today boosted the size of its pending initial public offering to as much as $120 million.

When it registered the IPO in March, Silk Road said it could fetch as much as $86 million. But last week the Sunnyvale, Calif.-based company cut the range, saying it planned to float nearly 4.7 million shares at $15 to $17 apiece, for gross proceeds of $70.5 million to $79.9 million.

Today Silk Road said it plans to offer 6 million shares at $19 to $20 a piece, which would deliver gross proceeds of $114 million to $120 million. The company developed the Enroute transcarotid stent and neuroprotection system to treat carotid artery blockages before they cause a stroke.

Silk Road has said it plans to use the cash to expand its sales force and operations, increase R&D including new clinical trials, expand internationally and possibly acquire new ventures or technologies.

The company said it plans to list under the “SILK” symbol on the NASDAQ exchange.

Silk Road has raised at least $104 million since 2015, when it first won 510(k) clearance from the FDA for Enroute in carotid stenting and angioplasty procedures. Pre-market approval for high-risk patients followed in May of that year.

Medical Alley companies beat Q1 investment total

A surge in first-quarter 2019 investments in Medical Alley Association member startups pushed them past their performance in the same quarter last year, according to the Minnesota-based trade group.

Seven of the 10 largest raises of the quarter went to medical device companies, which propelled the sector to its best first quarter on record, nearly doubling the second-best total. The funded companies make products ranging from cardiopulmonary intervention devices to novel orthopedic treatments for both chronic and acute conditions.

Get the full story on our sister site, Medical Design & Outsourcing.

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Silk Road Medical sets downsized range for IPO

Silk Road MedicalSilk Road Medical yesterday set the range on its forthcoming initial public offering, which would fetch $75 million at the midpoint.

The Sunnyvale, Calif.-based company’s Enroute transcarotid stent and neuroprotection system is designed to treat carotid artery blockages before they cause a stroke. When it registered the IPO earlier this month, Silk Road said it could fetch as much as $86 million. But yesterday the company said it plans to float nearly 4.7 million shares at $15 to $17 apiece, for gross proceeds of $70.5 million to $79.9 million.

Silk Road has said it plans to use the cash to expand its sales force and operations, increase R&D including new clinical trials, expand internationally and possibly acquire new ventures or technologies.

The company said it plans to list under the “SILK” symbol on the NASDAQ exchange.

Silk Road has raised at least $104 million since 2015, when it first won 510(k) clearance from the FDA for Enroute in carotid stenting and angioplasty procedures. Pre-market approval for high-risk patients followed in May of that year.

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