Pathway Medical Raises $40M for Device to Clear Out Blocked Leg Arteries

3/26/09Follow @xconomy

Pathway Medical Technologies, the Kirkland, WA-based maker of a device that clears out blockages in clogged leg arteries, has raised $40 million in new venture capital, Xconomy has learned.

The investing group was led by Amsterdam-based Forbion Capital Partners, and joined by HLM Venture Partners, Oxford Bioscience Partners, Latterell Capital Management, Cooperative AAC, and Giza Venture Fund, according to a regulatory filing. Pathway hasn’t issued a press release, although CEO Paul Buckman confirmed today that the company has completed the $40 million financing, as the first part of an ongoing $55 million round.

Pathway has been on a roll since July, when it won FDA approval to begin marketing its first commercial product, which it calls Jetstream. This is a tiny stainless-steel drill mounted on a catheter that slides inside clogged leg arteries, where it cuts through and vacuums out blockages. It’s approved for patients with peripheral artery disease, a condition related to cardiovascular disease that has caused 2 million Americans to seek treatment, complaining of pain when they walk. Most people go undiagnosed now, partly because there aren’t many good options for treatment. Pathway plans to use the new cash to beef up its marketing effort to make doctors aware of this new tool.

This is also a big deal locally, the biggest financing for a biotechnology company that we’ve covered since Xconomy launched its Seattle site last June (and the second-biggest overall behind the $83 million for Big Fish Games in September). Pathway has now raised $120 million since its founding in 1998.

“The Jetstream technology really has the capability to transform how we treat peripheral artery disease,” Buckman says. “It’s always hard to predict revenues, but we think we’re going to be profitable in 2011, and the intent with this financing is to get us from here to there.”

Pathway has lots of competitors fighting for a piece of this market, although each uses a significantly different technology. Plymouth, MN-based ev3 (NASDAQ: EVVV) markets the SilverHawk and RockHawk that slice through and scrape out blockages in the legs. Colorado Springs, CO-based Spectranetics uses a laser-based system. St. Paul, MN-based Cardiovascular Systems has a high-speed diamond-tipped cutting tool.

The Pathway device is different in that it’s the only one … Next Page »

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