When GlaxoSmithKline started up a venture fund a few years to invest in electronic medicines—treatments that use electrical impulses, rather than manmade chemicals or protein drugs, to impact disease—a startup called SetPoint Medical was its first investment. A few years later, with SetPoint nearing a key clinical trial, the British drugmaker has deepened its ties with the Valencia, CA-based startup.
SetPoint said this morning that it’s nabbed $15 million in new funding. The cash is an extension to its existing Series C round, which now totals $43 million. Action Potential Venture Capital, the $50 million fund GSK founded in 2013 to invest in electronic medicines, increased its stake in SetPoint as part of the funding, and partner Juan-Pablo Mas has joined the startup’s board of investors.
SetPoint said that it’s added a new strategic backer to its syndicate as well. It didn’t disclose the name of the investor, but the company already has some other strategic names providing some cash—Covidien (via Covidien Ventures) and Boston Scientific. Venture firms Morgenthaler Ventures, Foundation Medical Partners, and Topspin Partners are also aboard.
The cash will support a Phase 2 trial of a treatment SetPoint is developing for rheumatoid arthritis (RA). It’s a tiny implantable device that electrically stimulates the vagus nerve in the neck. These impulses are meant to send signals to the body that curb the overactive immune response that causes inflammation in diseases like RA. The device is installed via surgery, and can be controlled by an iPad.
As CEO Anthony Arnold explained in this report from medgadget.com, SetPoint’s pitch is affordability and safety. RA patients typically start out on disease-modifying antirheumatic drugs like methotrexate before they’re put on injectable biologics like adalimumab (Humira) and etanercept (Enbrel). Those biologics generate billions of dollars in sales, but they can also cost thousands of dollars per month, and potentially lead to significant side effects like infections.
Arnold told medgadget.com back in 2012 that SetPoint’s device is designed to last 10 years, and would cost patients what they would pay for “only 12 to 18 months of drug therapy.” The question is whether SetPoint’s device is as effective as, and safer than these therapies. The field of RA treatments is moving fast, too; there are newer oral drugs on the market now like tofacitinib (Xeljanz), and others in development. SetPoint will begin its Phase 2 test next year.
“SetPoint’s progress to date has been impressive, with promising data showing the potential of bioelectronic medicine as a revolutionary new way to treat diseases without drugs, using the body’s own systems,” said Action Potential’s Mas, in a statement. “We look forward to working with SetPoint to help fulfill this potential to deliver innovative treatments for rheumatoid arthritis, Crohn’s disease and other autoimmune and inflammatory diseases.”