Vascular Dynamics Inc. has raised $13.2 million at a company value of $31 million. A West Coast equity fund, whose name was not disclosed, led the round. The company was founded in 2008 at Rainbow Medical Ltd. an incubator founded by Yossi Gross and controlled by Leon Recanati's GlenRock Israel. Rainbow participated in the financing round.
Vascular Dynamics has developed a passive, catheter-delivered stent implant for the treatment of high blood pressure (hypertension). The stent is in the preclinical stage (animal trials). Like all Rainbow companies, Vascular Dynamics was based on an idea of Gross's. Vascular Dynamics president and CEO Bob Stern, who previously served as president of Micrus Endovascular, which developed a device for the treatment of strokes and was acquired by Johnson & Johnson (NYSE: JNJ) for $480 million.
Six months ago, Vascular Dynamics moved its operations to California.
Rainbow COO Gilad Lorberbaum said that Vascular Dynamics' miniature stent is made from nyethanol. The stent is implanted via a catheter into the cerebral arteries that carry blood to the brain. "The implant affects the natural system known as baro-receptors, which send signals to the brain and affect blood pressure. By easing the hardening of the arteries, the implant activates this system, which is not functioning properly in conditions of hypertension," he told "Globes".
On its website, Vascular Dynamics says, "Hypertension affects over 74 million people in the US and is estimated to cause 1 in every 8 deaths worldwide. It is a major risk factor for cardiovascular disease, morbidity, and mortality. It is a costly disease, with treatment of hypertensive patients in the US costing an estimated $60 billion a year."
Hypertension is usually treated with medications, which reduce blood volume or expand blood vessels, but, as Vascular Dynamics states, "25% of hypertensive people are unable to adequately regulate their hypertension with medications and lifestyle modifications."
Lorberbaum says, "The market is huge, and is dominated by medications, usually a cocktail of drugs. There is now enthusiasm for the use of device to treat hypertension. A company called Ardian was acquired by Medtronic Inc. (NYSE: MDT) for $1.3 billion. Its technology operates by attacking renal arteries, which send signals to the brain about hypertension.
"Another company, CVRx, also works on the cerebral arteries like us, but its product acts by an electrical stimulation of the system and is implanted by a surgical procedure, whereas our product is completely mechanical, is not based on electrical energy, and is implanted by catheter. CVRx also announced recently insufficient results from a trial of its product, which was unable to achieve statistically better results compared with a placebo."
Vascular Dynamics has completed a preclinical trial of its product. The trial was the basis for the current financing round. The company plans to begin a human clinical trial in the third quarter of 2012. "We believe that 2013 will be a critical year for the company," says Lorberbaum. The financing should suffice the company through 2013.
Vascular Dynamics' financing round is the second by a Rainbow portfolio company. Enopace Biomedical Ltd. raised $7 million from a strategic investor at a company value of $29 million, before money. Two other companies are in talks with investors.
Published by Globes [online], Israel business news - www.globes-online.com - on March 7, 2012
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