Third Rock’s Ninepoint Medical Grows Up, Plans $35M Series B
Ninepoint Medical earned the distinction of becoming the first—and to date, the only—medical device maker seeded by startup creation specialist Third Rock Ventures when it set up shop in 2009. Some four years and $33 million later, Ninepoint’s vision, a product that can make cancer diagnosis more efficient, is becoming a reality.
“It’s a pretty exciting week,” Ninepoint CEO Charles Carignan says.
Today, the Cambridge, MA-based company began selling its first product, the NvisionVLE Imaging System, to academic and large community hospitals around the country—specifically, those treating patients with advanced esophageal disease. That event will fuel a new $35 million round of financing that Ninepoint is in the midst of putting together, Carignan says.
“We’ve been living off of our [$33 million] Series A, and now it’s time for some more capital,” he says.
That’s a big step from where Ninepoint first started.
According to Carignan, Third Rock’s idea in creating Ninepoint was to put together a company that could use a specific technology or platform that could help shorten the time between a person having symptoms, coming in for an examination, getting a diagnosis, and then getting treated.
Carignan, previously the chief medical officer of Boston Scientific (NYSE: BSX) and later Novasys Medical, met with Third Rock several times before coming onboard as CEO in the summer of 2009, before that technology was even in place.
Ninepoint found its product idea at a meeting with Dr. Gary Tearney of Massachusetts General Hospital, during which he described a method of medical imaging called optical frequency domain imaging, or OFDI. That technology can look deep into tissue and see large areas very quickly, creating a more efficient way for doctors to identify a disease.
That’s a big change from the current practice, which typically uses “random biopsies” to find disease, Carignan says.
“With our technology, you’d be able to target biopsies and improve the diagnostic yield of those biopsies,” he says.
Ninepoint licensed the technology from Massachusetts General Hospital in 2010, and turned it into the NvisionVLE system with the goal of using the device to make things like traditional biopsies more efficient.
The FDA approved the NvisionVLE system as an imaging tool in December 2011, and expanded its reach in April to allow Ninepoint to sell the device to clinicians as a diagnostic device for esophageal diseases such as cancer.
Ninepoint has big plans for the system’s applications from there, however. First, it wants to use the product in other gastroenterology settings, such as detailed looks at the pancreas, colon, and bile duct. Then, it hopes to use the system as a diagnostic tool for lung and bladder cancers, and eventually for benign diseases of the ear, nose, and throat, such as asthma.
Ninepoint is selling its imaging console for $149,000, and the individual catheters used along with it for $1,095 apiece.
The company’s follow-up product is its tethered capsule, a pill version of the system. Rather than undergoing a typical endoscopy, which requires anesthesia, patients would take a sip of water and swallow a pill in a doctor’s office and give the clinician the “same imaging depth” as the NvisionVLE.
That pill wouldn’t work if a doctor needs to actually grab a piece of tissue to examine, but it would help a patient avoid going through an endoscopy if in-office imaging is all that’s needed. Ninepoint hopes to begin selling that by the end of 2014, Carignan says.
Ninepoint’s $33 million Series A brought the company where it is today, with 59 employees and the capability to manufacture its devices on its own. Once it puts its Series B together, Ninepoint will use the money to roll out the NvisionVLE system in the U.S. this year and Europe in 2014, expand its use into other potential disease areas, bring its tethered capsule to market, and add people in sales, manufacturing, marketing, and reimbursement.
From there, Carignan concedes that the way Third Rock and co-investor Prospect Ventures Partners will likely get their returns is through an acquisition, given the lukewarm state of the IPO market for med-tech companies. But Carignan is bullish on Ninepoint’s prospects.
“I think that once we show the value of this in depth imaging, a number of companies out there are going to be interested in acquiring the technology,” he says.