Stent Development Company Initiating Clinical Trial Raises $8M
By Stephanie Baum
A stent development company founded by serial entrepreneurs Robert Fischell and his sons David and Tim, has brought in $8 million in new investment for its second generation stent for cardiac surgery, raising about $25 million in debt and equity since December, according to Form D filings with the Securities and Exchange Commission.
The additional investment will go towards initiating clinical trials for the second generation of its Acrobat stent in New Zealand, Europe and South America this year.
In an interview with MedCity News, Mark Pomeranz, the CEO of Svelte Medical Systems, said the drug-eluting stent creates a low thrombogenic surface to reduce the possibility of blood clots. Its coating is designed to dissolve as the drug is delivered, lowering the chances of an inflammatory reaction from the coating. The original Acrobat stent received CE mark approval in Europe in 2010.
Svelte is conducting a 30-patient clinical trial of its drug-eluting stent in New Zealand, a favorite for cardiology trials because its country-wide approval process is quicker and easier from a regulatory perspective.
Pomeranz, a veteran of Johnson & Johnson (NYSE:JNJ) company Cordis Cardiology, acknowledged that it has been a challenging climate to raise money for medical device companies as venture capital firms move away from investing in the sector due to the pace of the FDA and the new healthcare tax. Additionally, with more revenue coming from overseas, more businesses are moving activities offshore and repatriation taxes are reducing the likelihood of their return, he said. The industry is facing a new era.
Despite setting itself up to compete with the likes of Medtronic (NYSE:MDT), Abbott Laboratories (NYSE: ABT) and Boston Scientific (NYSE:BSX), Pomeranz sees an opportunity to carve a niche for itself.
The global stent market for the heart is estimated at $5 billion and the stent market for peripheral arteries, an area the company plans to move into, is about $500 million.
“The nice thing in the U.S. market is that even though there are 1,000 catheterization labs, 200 of them drive 60 percent of volume in the market,” said Pomeranz. “That means you don’t need a large sales force to be very effective. When you’re looking at a $5 billion market, even 10 percent to 15 percent of that is very nice.”