One of the co-founders of HealthTech Capital, Don Ross, offered Brian Glaister a blunt assessment last summer when the young entrepreneur came pitching a new device to help disabled people walk.
Ross responded that his wife, Donna Jang, is a stroke survivor who struggles to walk more than a couple minutes at a time. She would be the first one to judge whether Glaister’s product was as good as advertised. Glaister didn’t blink: Within a couple weeks, he was on a plane to Silicon Valley, where Ross and his fellow investors are based.
“When Brian came to us, I told him flat out, ‘You have to get a prototype sized up so Donna can try it. If she doesn’t like it, you’re toast. If she does, maybe you’ll have a shot,'” Ross recalled. “And Donna really liked it.”
Now HealthTech Capital is leading a syndicate of medical device angel investors who are putting $750,000 in equity and convertible debt, out of a round that could be worth $1 million, into Glaister’s startup, Seattle-based Cadence Biomedical. HealthTech is being joined in the financing by Alliance of Angels, Frontier Angels, Keiretsu Forum, Sand Hill Angels, and Wings. The new financing means Cadence has raised a little more than $1.5 million in investment and government grants since its founding in August 2007. It now plans to use the cash to bring the first commercial versions of its walk-assist device to the orthotics market this spring.
The Cadence technology, licensed from the Cleveland Clinic, looks like a fancy leg brace. It is essentially is one, although it has a spring that stretches from hip to ankle that is designed to store and release energy that can help propel people as they walk forward. Cadence’s hope is that can help about 2.3 million people in the U.S. who have extreme weakness in their lower legs that impairs their ability to walk—such as stroke survivors, people with partial spinal cord injuries, brain injuries, or patients with multiple sclerosis or amyotrophic lateral sclerosis.
There are existing alternatives, of course, like canes, walkers and wheelchairs, which have their limits. There are also newer high-tech robotic options in various iterations from companies like Berkeley, CA-based Ekso Bionics, Sunnyvale, CA-based Tibion, Israel-based Argo Medical Technologies, and New Zealand-based Rex Bionics. Cadence says its technology is different in that it doesn’t use expensive motors or batteries, and relies solely on kinetic energy generated by the user. That means it can charge a lower price (something less than $10,000 for insurers), and it can be used in the home, as well as a supervised setting like a physical therapy office, Glaister says.
Since Cadence’s device is considered an orthotic, it doesn’t need to go through the long, expensive, and risky journey of seeking FDA approval to start selling its product. So with this financing, it is getting ready to go straight to the market with its product through a trade show appearance in late March, Glaister says.
“It’s a big deal for us,” Glaister says. “It’s hard to find early stage medical device funding in Seattle. It’s great now that we have connections in Silicon Valley, and we have $1 million into the company to help us with marketing.”
Partly because Cadence doesn’t need FDA clearance, it hasn’t generated a body of clinical evidence to prove its product works. What it has are anecdotes from individuals like Jang, who could only walk a couple of minutes on their own, and struggled with stairs, and suddenly were able to walk alone for 30 minutes, and go up and down stairs with the device. While anecdotes may not win over the evidence-based medicine believers, they did win over Cadence’s investors.
“It’s like nothing she’s seen in 20 years, and she’s tried them all,” HealthTech’s Ross said, referring to Jang. She was so impressed that she connected Glaister to contacts at UCSF who she thought might be able to help further develop the technology.
Orthotics specialists have tried to move their discipline towards evidence-based medicine, but haven’t fully succeeded, and often can be persuaded to recommend a product to their patients based on compelling case studies, Glaister says. Cadence has tested out its product with more than a couple dozen patients who are happy with it, but the company is now working on designing a trial of about 20 patients, to measure things like how fast people can walk 25 feet, how far they can walk in six minutes, and how much oxygen they consume while walking. Cadence hopes to get that trial underway in the second half of 2012, Glaister says.
The folks at HealthTech are already looking forward to the next iteration of the Cadence device, which they hope will include a pedometer that can wirelessly transmit data on how far a person has walked. That kind of thing could help encourage people to share their rehab progress with friends and family members, who could cheer on their walking progress on Facebook.
Glaister, 31, has gotten so wrapped up in the new company that he hasn’t gotten around to finishing his PhD dissertation in mechanical engineering at the University of Washington. He said he hopes to be able to finish that at some point, but the company still consumes the bulk of time. “I hope they don’t kick me out before I get a chance to finish” the PhD, Glaister says.
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