Article preview reprinted from IN VIVO - April, 2009
The financial world may be in crisis, but top-tier medical device companies can still raise capital. But at what price? Four medical device execs answer those questions and many more.
Device CEOs Who Find The Funding
Article preview reprinted from IN VIVO - April, 2009
Numbers don't lie. By all accounts, venture capital commitments to all industries--including medical device companies--over the first quarter of this year are down, way down. As any chief executive officer can testify, it's getting rough out there for venture-stage companies hungry for new capital. However, venture capitalists don't lie, either. If venture capital firms have the capital to invest, they're putting it to work. Yes, they're aggressively negotiating lower valuations and preferential terms, but the money is out there for the right companies.
So what makes a company the right company? A panel of CEOs representing some of the more promising medical device companies convened to discuss that question at last month's FDC-Windhover's IN3 West conference in Las Vegas. Together, the four companies represented on the panel—interventional ENT pioneer Acclarent Inc.; Aptus Endosystems Inc., a AAA start-up; Lutonix Inc., which is developing a drug-eluting balloon; and superDimension Ltd., a minimally invasive pulmonology company—raised close to $100 million over the past year.
The capital didn't always come easily. Alan Kaganov, a general partner at US Venture Partners and chairman and co-founder of Aptus, says the company watched one potential investor pull out during due diligence just as the economy began to sink in the fall. Aptus' investors grappled with the idea of an insider round, an approach Kaganov resisted. Instead, the company secured Heron Capital to lead the new $30 million round, with new investors and existing investors providing a balance of the funds. [200930015] Aptus is testing an endograft system for abdominal aortic aneurysms. William Facteau, chief executive officer of Acclarent, which is developing a new, catheter-based method of performing sinus surgery, faced a similar dilemma after pulling the company's S-1 filing in December and choosing to raise another private round. Acclarent had filed to go public earlier last year, a move that both surprised and encouraged many. (See "Acclarent, By a Nose," The IN VIVO Blog, June 2008 [A#3535198295467678492].) Unlike Aptus, Acclarent leaned heavily on existing investors for its most recent $26 million Series D, but it opted to bring in a strategic investor, Johnson and Johnson Development Corp., to avoid the insider-only round.
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Companies mentioned in this article:
Acclarent Inc.
superDimension Ltd.
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