CardiAQ Captures $6.5M A Round Led by Former CoreValve President
[Updated and clarified---1/12/10, 2:30 pm ET, with timing of potential human study and other details] CardiAQ Valve Technologies, which is developing a catheter-based alternative to open-heart surgery for mitral valve implantation, reports today that it has raised $6.5 million in a Series A round of funding. The funding is expected to support R&D needed to advance the firm’s main product to human studies.
Rob Michiels, the former president and COO of CoreValve (now Medtronic CoreValve) and a board member at CardiAQ, led the round, which included angel investors that backed CoreValve in 2002, according to CardiAQ. Previous investor Broadview Ventures also contributed to the financing. The financing includes the conversion of $1.5 million in debt to equity in CardiAQ, meaning that there was a total of $5 million in new capital raised in the deal, said CEO J. Brent Ratz, in an interview. CoreValve, a California provider of a catheter-based system for aortic valve replacement, was acquired by Minneapolis-based medical devices giant Medtronic (NYSE:MDT) in April 2009 for an impressive $700 million. The deal was one of the largest M&A transactions in the medical devices industry last year. [The above paragraph was updated to add information about the firm's debt-to-equity conversion in its latest round of financing.]
CardiAQ has garnered high praise from Michiels for its approach to treating mitral regurgitation, a heart disease in which the mitral valve fails to close and allows blood to leak backward between the two left chambers of the heart. The standard treatment for this problem is open-heart surgery, which poses health risks to patients such as heart attacks and infections. CardiAQ and other medtech startups such as Stoughton, MA-based CardioSolutions are developing techniques to avoid open-heart surgeries by either replacing or repairing failed mitral valves with catheter-based approaches.
“[CardiAQ's] success in raising this over-subscribed round in record time is a dramatic endorsement of the strength of our transcatheter mitral valve implantation concept for patients who suffer from functional mitral regurgitation and are often too sick to have [open-heart] surgery,” said CEO Ratz, in a statement. “Our valve replacement technology will facilitate a non-surgical alternative that could be more effective than transcatheter repair and just as effective as surgical replacement in a mitral market that is estimated to be $1.2 billion by 2014.”
Ratz said that the company is aiming to begin human studies of its mitral valve-implantation system in 2011. Arshad Quadri, a cardiac surgeon at St. Francis Hospital in Hartford, CT, is the founder and chief medical officer of the company. [This paragraph was changed to add information on when the firm expects to begin human studies.]