How Did Calypso Raise $50M? The Story Behind Seattle’s Biggest VC Deal of 2009
Word out of Calypso Medical Technologies the past year hasn’t been what most people would call positive. The Seattle-based medical device company cut one-fifth of its staff in December. Even in its third year on the market, it was still struggling to get Medicare to pay for its devices that pinpoint radiation in ways that are supposed to help minimize side effects of prostate cancer treatment.
So what enabled Calypso to corral $50 million, the Northwest’s biggest venture capital deal of the year so far? That’s what I asked CEO Eric Meier yesterday afternoon after his company dropped that bombshell.
To hear Meier tell the story, a number of small, but important things have been adding up behind the scenes. Calypso first won FDA approval for its technology in July 2006, and at last count, it has now sold its system to nine of the 33 top-ranked cancer centers in the U.S. Calypso cut a deal this summer with Varian Medical Systems—the dominant maker of radiation therapy machines with 70 percent U.S. market share—in which Varian will incorporate the Calypso technology into its machines. Data from clinical trials is starting to pile up that says the company’s technology works for other tumors in the pancreas and lungs. And Calypso has a chance to tap into some new markets, since it has recently received approval from regulators in Canada and the European Union.
“It’s really about execution for us,” Meier says. “The technology risk is behind us, the clinical risk is behind us.”
Calypso, for those new to the story, was founded in 1999 by Seattle-based Frazier Healthcare Ventures to develop an idea for what it now markets as “GPS for the Body.” The system is designed to make sure that beams of radiation are aimed exclusively at cancerous prostate glands, without harming healthy tissue nearby. The machine monitors movement of the prostate in real-time, meaning if a patient burps, twitches, or even has some gas buildup in the rectum while he’s lying on the table, technicians can see in real-time if the radiation beams are falling off track. If it’s hitting the bladder, they know. That’s important because it means they will likely turn off the machine or adjust the table, which could save the patient from impotence or having to wear adult diapers the rest of his life.
The system uses transponders that are about the size of a grain of rice, which get implanted … Next Page »