Prostate Treatment Developer HistoSonics Gets $11M, U-M Tech Transfer Beams With Pride
Seems everybody is getting what they need out of medical device startup HistoSonics, a University of Michigan spinout that recently collected $11 million in Series A financing.
Ken Nisbet, executive director of the U-M Tech Transfer office, got what he calls a “dream come true,” a kind of poster child for everything his office can do to help good ideas leave the lab and enter the marketplace.
Chris Gibbons, the company’s president and chief operating officer, found a new company to jump right into after the success of her last U-M-launched startup.
A group of top U-M scientists get to see their ideas produced in the real world-and not simply in academic papers.
Oh, and men who suffer from enlarged prostate might find relief through a device that can noninvasively both image and attack their condition, without the need for incisions or surgery.
First, the news: The $11 million Series A round came in January and was led by Venture Investors, based in Ann Arbor, MI and Madison, WI. Also on board with the financing are Fletcher Spaght Ventures, Hatteras Venture Partners, Early Stage Partners, and TGap Ventures.
Nisbet beams like a proud parent when it comes to HistoSonics. His office, along with the Coulter Translational Research Partnership at the U-M Department of Biomedical Engineering, provided initial funding and know-how to help the inventors take their project to the next level. They did that by matching them with experienced executives and mentors. The Coulter Project teamed a urologist from the U-M Medical School with the biomedical engineers. And the Tech Transfer Center provided a “mentor-in-residence” in the form of Jim Bertolina, a medical device expert from Kalamazoo who is now the company’s chief technology officer.
That’s where Gibbons came in. She had been involved in the launch of U-M startup Sensicore, a company that developed sensor networks for water testing. As chief financial officer, Gibbons helped guide Sensicore through to its acquisition by General Electric in 2008. So, she was ready for a new challenge. Or, as Gibbons puts it, “What do I do when I grow up?”
She found the answer at Venture Investors in Ann Arbor, where she landed a gig as an “executive-in-residence.” It’s a program sponsored, in part, by the Michigan Venture Capital Association using money from the state’s 21st Century Jobs Fund.
As the executive-in-residence, it was her job to take a year and look for a venture-worthy deal for the fund to invest in, then join the firm as an executive. HistoSonics was one of the very first deals she looked at, and knew at once that there was something there. There was a lab prototype for her to look at, and that had her hooked.
“Being able to see it work was really quite amazing to me,” Gibbons says. “To actually go to a lab, see its capabilities.”
In simple terms, what HistoSonics’ technology does is treat enlarged prostates with a noninvasive, image-guided system that does not use heat, as current systems do. Instead, it creates microscopic bubbles that more-precisely eats away at tissue, which then can be reabsorbed into the body or passed through urine. No opening up the patient, no use of blood thinners that produce other side effects.
The first application of the technology will be treatment of benign prostatic hyperplasia (BPH), a condition that, Gibbons says, patients and their insurers spend more than $300 million treating in the United States every year and more than a half-a-billion-dollars worldwide. And, with the condition’s prevalence-it’s found in half of all men over 50 and 80 percent of men over 80-the market will only grow as the population ages.
The co-inventors of the technology are Charles Cain, Brian Fowlkes, Tim Hall, Zhen Xu and Dr. William Roberts, all from the University of Michigan.
What excites Gibbons about the technology is that it appears to carry with it a magic word among drug and medical-device developers: “Platform.” The BPH market, Gibbons says, is only the beginning. This technology, once honed and perfected, can eventually be deployed against other conditions, including cancer.
“This just looks like a platform technology that could be a true game-changer,” Gibbons says.
But, first thing’s first, the next couple of years at HistoSonics will be focused on developing the product and forming a strategy to navigate the regulatory process. The company has officially left its U-M mother ship and recently moved into new offices and labs on Liberty Road in Ann Arbor. They may hire another engineer in 2010, but then probably will not add any more people until 2011 when the company prepares for clinical studies, Gibbons says.
“We are looking to get through all those processes and hurdles and be able to prepare ourselves for commercial launch probably within three to four years,” Gibbons says.
Under the leadership of CEO Tom Davison, who has a history in the medical device industry, Gibbons says the company can expect a Series B investment well before commercial launch.
That 3-to-4-year time frame is ambitious for a medical device company. But even if it takes longer, Gibbons seems to have a great deal of patience. She spent a little over a year in due diligence before the $11 million investment came through-partly because the local economic downturn made everybody very cautious about new venture deals. That year-long delay might have been frustrating for the technical team, she said, but it was very productive when it came to advancing development of HistoSonics’ business plan.
And over at the Tech Transfer Office, Nesbit agrees that the company is off to a strong start because of the way U-M-launched it-a true collaboration between state, university and private-sector programs.