Nothing says that a start-up has arrived like a $10 million-plus venture capital deal.
But for start-ups in the medical world, an eight-figure check is only one step of what can be a long road to getting a product to market.
So with biotechnology, specialty pharmaceutical, and medical-device firms, it's important to look past the dollar signs to the people who have signed on for what is far from a sure thing.
Last week, Wayne-based Intact Vascular Inc. announced that it had raised $15.5 million from Quaker Partners, of Center City; H.I.G. BioVentures, of Miami; and several angel investors.
Founded in 2008 by Peter A. Schneider, a surgeon at Kaiser Permanente Clinic in Honolulu, and medical-device designer Robert M. Giasolli, Intact Vascular is developing a device to treat peripheral artery disease (PAD), which affects 8 million to 12 million people in the U.S. According to the National Heart Lung and Blood Institute, it's a disease in which plaque builds up in the arteries of the upper and lower legs, cutting blood flow and causing pain.
The most common treatments for PAD are balloon angioplasty or inserting a stent. Intact Vascular's idea is stent-like but uses a lot less metal, according to Carol A. Burns, the company's chief executive officer.
Burns, 53, was hired to run what is a four-person company last September. This is not the first start-up for Burns, a former critical-care nurse with a varied background working for large and small medical-device firms.
The West Chester native was the first employee hired by Embrella Cardiovascular Inc., a Malvern medical-device maker, in March 2008. As its vice president of product and business development, Burns "worked very hard with physician key-opinion leaders to manage a clinical trial that was ultimately successful," said Jeffrey F. O'Donnell, chairman and CEO of Embrella at the time.
Embrella was acquired by Edwards Lifesciences Corp., of Irvine, Calif., for $42.6 million in cash in March 2011.
Before Embrella, Burns was director of international sales and marketing for Animas Corp., a Frazer-based maker of insulin pumps acquired by Johnson & Johnson for $518 million in 2006. Animas was founded by Katherine D. Crothall, who now sits on the board of Intact Vascular.
The board of directors of Intact Vascular is chaired by Dennis Wahr, the former CEO of Minneapolis-based Lutonix Inc., which developed a drug-coated balloon technology to treat peripheral artery disease. C.R. Bard Inc., of Murray Hill, N.J., acquired Lutonix for $298 million in December.
Sense a pattern here? Small device firms push forward with new technologies and catch the fancy (and cash) of new-product-hungry health-care companies.
That begins to explain why two venture capital firms and several angel investors, including Crothall, are willing to risk $15.5 million on Intact Vascular.
Intact Vascular will use the financing to complete a 138-patient clinical study being conducted in Europe of its Tack-It Endovascular Stapler System for use during leg surgery above the knee to improve blood flow in arteries, Burns said.
A separate clinical trial in Europe will study the device's performance in lower-leg operations. All patients will be followed for a year following their procedures.
Burns cited market research by Millennium Research Group that indicated there are about 215,000
such procedures above
the knee and fewer than 53,000 below the knee
in the U.S. "The interesting thing is these numbers are rising rapidly because of obesity and diabetes," she said.
Interesting and distressing at the same time. But then, that's how business opportunities emerge and why millions of dollars are at stake for companies that can persuade others that they have a better solution.
Contact Mike Armstrong
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