KALAMAZOO — The $8 million that Innovative Cardiovascular Solutions LLC wants to raise in a new capital round would support completion of a clinical trial in Europe and pay for an upcoming U.S. trial.
The funding also could ultimately position the company for a possible sale.
A developer of a medical device designed to increase patient safety during a heart procedure, Innovative Cardiovascular Solutions has commitments from angel investors in the U.S., Asia and Europe totaling almost half of the $8 million goal, co-founder and CEO Kevin Plemmons told MiBiz.
The Kalamazoo-based company “already has some pretty big commitments coming in on top of that,” Plemmons said, adding the Series C capital round “hopefully will be our last.”
“This money should take us to an exit,” he said.
If successful, the Series C round would increase the amount of capital Innovative Cardiovascular Solutions raised to $18 million since it began work five years ago to develop and commercialize the Emblok Embolic Protection Catheter. Designed to increase patient safety by reducing the chance of a blockage and preventing a potential stroke or other neurocognitive damage, the device collects debris in the blood that may dislodge during a transcatheter aortic valve replacement (TAVR).
Innovative Cardiovascular Solutions’ move toward the final stages of commercializing the Emblok Embolic Protection Catheter comes soon after a sale involving the developer of a competing device.
Boston Scientific Corp. (NYSE: BSX) closed in early August on the acquisition of Santa Rosa, Calif.-based Claret Medical Inc. for $270 million. Claret Medical previously received U.S. Food and Drug Administration clearance for its embolic protection device in TAVR procedures. In announcing the deal in July, a Boston Scientific executive noted the technology could potentially extend in the future to other heart procedures.
One research report issued in February estimated the global market for embolic protection devices to reach $604.9 million by 2023, up from $405.5 million in 2018. Another report, by Global Market Insights Inc. in Shelbyville, Del., projects the market to surpass $1.8 billion globally by 2024 as the incidence rate of cardiovascular disease continues to rise and care providers increasingly adapt to using minimally invasive procedures to treat patients.
As the market for such safety devices further emerges and embolic protection becomes the standard of care, the sale of Claret Medical to Boston Scientific could represent a benchmark for Innovative Cardiovascular Solutions’ eventual investor exit, Plemmons said.
“Now, all of a sudden, the dart has been thrown on the board. Now we know what certain companies will be willing to pay for such technologies,” said Plemmons, who believes his company’s device offers greater patient protection than products currently on the market.
Innovative Cardiovascular Solutions has worked since 2013 to develop and commercialize its embolic protection device, which was developed by Dr. William Merhi, an interventional cardiologist at Spectrum Health in Grand Rapids.
The Claret Medical deal also has been helpful as Innovative Cardiovascular Solutions seeks additional investors for the Series C round, Plemmons said.
“It validated the market,” he said. “Then investors, they see this (and) that makes it a little more palatable for them to place that investment with the understanding the market is moving that way.”
Innovative Cardiovascular Solutions initiated a clinical trial in Europe last year but stopped to make modifications based on feedback from primary investigators in Italy to improve the device’s function and enable its use in any length or diameter of aorta. The company incorporated suggested changes into an updated design to use in completing the European trial involving 40 patients, and in the U.S. trial.
If successful, the clinical trials would validate the device’s safety and efficacy and lead to regulatory approval in each market.
The European trial could resume in November. The U.S. trial could begin late in the fourth quarter or early in the first quarter of 2019 at 20 medical centers and take about a year to complete, Plemmons said.
Innovative Cardiovascular Solutions maintained contact with a number of medical device firms over the years that are interested in the technology behind its embolic protection device. While the company could take the device to market on its own or through a strategic partnership, its current plan is to sell the technology.
“Ultimately, we’d be looking to sell the company as an asset purchase,” Plemmons said. “We would hope that sometime during the trial or at the conclusion of the trial, the data is what we believe it will be, and that it’s good, and someone will come in and acquire our technology.”
In addition to the clinical trials, proceeds from the Series C capital round will go to building inventory and quality systems, and securing final regulatory approval.
Innovative Cardiovascular Solutions contracts with Barrington, Ill.-based Medical Murray Inc. to produce the device.