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in a patient’s prostate gland. That transponder sends a signal to a base receiver that processes the precise coordinates of the prostate in real-time, and displays it on a simple user interface for the technician. The base machine costs $400,000 to $500,000, and Calypso sells the implantable transponders for $1,200 apiece.
The company has been working hard for years to make this technology user-friendly for doctors and technicians, and it has apparently taken a big step in the past year. Earlier versions of the technology required technicians to turn off the radiation when the beams fell off track, so they could adjust the patient—which could be a time-consuming process. That hurts the bottom line of radiation therapy centers, because if they need to spend more time with a patient, that means they get to process fewer patients each day.
Knowing this, Calypso has found ways to integrate its technology into the radiation therapy machine itself. If the whole thing is integrated, then radiation beams can be adjusted on the go to keep them synchronized with the movement of the prostate. That means there’s no need to shut down the machine, and waste time adjusting patients on the table.
“We have instant feedback,” Meier says. “You can adjust the therapy on the fly.”
While doctors and patients are buying into the concept—at least 2,800 patients had gotten this therapy at the last available count in March—Calypso will have to show hard data that this improves patients’ quality of life if it’s going to persuade payers to reimburse for this work. Calypso isn’t saying much about what kind of results it has to support its goal of improving patients’ lives, although Meier says the company plans to present detailed findings at the American Society for Therapeutics Radiology and Oncology (ASTRO) meeting in early November in Chicago.
What exactly will Calypso do with the new money? The company will look to beef up its commercial presence in North America and Europe, keep investing in research against other tumor types, and work to incorporate its technology with radiation therapy machines, Meier says. The company has 136 employees now, down from almost 200 in early December, and he didn’t want to commit to specific growth numbers in terms of hiring.
The venture capitalists who are making this bet must think Calypso has absolutely stratospheric potential. The company has now raised more than $175 million since it’s founding, so by anybody’s math, it’s going to be awfully hard to achieve the classic 10-fold return on investment that VCs seek. But this wasn’t one of those cases we see of existing VCs pumping some money in to prop up a desperate loser in its portfolio. Two of the major investors in this $50 million round—Frazier Healthcare and Bay City Capital—are existing investors. Two of the other investors, Skyline Ventures and InterWest Partners, are making their first investments in Calypso.
Skyline has a particularly impressive record in medical devices. It invested in Sunnyvale, CA-based Intuitive Surgical (NASDAQ: ISRG), the developer of the da Vinci surgical robotic system. Its stock closed yesterday at $244 a share.
Calypso isn’t anywhere near that kind of valuation, and isn’t even profitable. One of its goals in this financing will be simply to turn profitable. But the company, and its investors, are obviously still daring to dream big.
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