Spiration Pulls in $7M Debt Financing For Device to Treat Lung Diseases
[Update: 1:55 pm, 09/30/09. See below] Spiration, the Redmond, WA-based maker of a device to treat deadly lung diseases like emphysema and chronic bronchitis, has raised $7 million in debt out of a $10 million financing, according to a regulatory filing.
The financing is coming entirely from Spiration’s partner in Europe and Japan, Olympus Medical Systems, according to Spiration CEO Rick Shea. News of the financing was first reported by TechFlash.
[Updated with company comment.] “It’s important to us because this further establishes our relationship with Olympus,” Shea says. “It’s at a point when money is tight, and partnerships are important.”
Spiration won a limited FDA approval last October to start selling its device to a small population of about 4,000 people in the U.S. who have prolonged air leaks after undergoing surgery to remove a diseased part of their lungs. The Spiration device, a tiny implantable valve that doctors use to block off air flow to a diseased region of the lung, is currently being tested in a rigorous trial of 250 patients that will determine whether it is good enough to be used for a much bigger percentage of the 300,000 U.S. patients with chronic obstructive pulmonary disease who might be candidates for the treatment. The market for treating these patients is worth at least $1 billion a year, Spiration has said.
Spiration is looking to complete enrollment in its pivotal clinical trial by the end of this year, Shea says. That study, which directly compares the company’s product to a sham procedure, will follow patients for another six months to see if they perform better on the experimental device. The company is still blinded to results of the study while it is still ongoing, Shea says. He wouldn’t say how long the money should last Spiration.
The company, which has about 50 employees, has raised about $97 million since it was founded in 1999. Its syndicate includes Three Arch Partners, New Enterprise Associates, Sprout Group, InterWest Partners, Investor Growth Capital, GE Capital, Saints Capital, and Japan-based Olympus. Spiration has had a partnership with Olympus since July 2008 to commercialize its IBV Valve System in Europe.
Competition has been following fast behind Spiration in its quest to come up with a minimally invasive alternative to lung surgery for patients with severe emphysema. One of the key technical people from the early days of Spiration, Robert Barry, has since moved on to a cross-town competitor in Seattle called Uptake Medical. Uptake, which raised $3.4 million out of a $13 million equity round earlier this month, uses a method that seals off damaged parts of the lung without leaving behind an implantable device. Uptake hasn’t yet advanced to the final stage of clinical trials.