Good news this morning from Redmond, WA-based Healionics. The company, which develops technology to promote healing around implantable medical devices, has raised $2.6 million in a second round of angel financing.
The cash comes from some of the Northwest’s biggest angel networks, including the Alliance of Angels, Bellingham Angels, Keiretsu, Tacoma Angel Network, and Zino Society. This is the second round of financing this year for Healionics, which pulled in $1.7 million in an earlier round in January.
Healionics, founded in 2007, has its roots in technology developed over almost a decade at the University of Washington by the prolific bioengineering professor, Buddy Ratner (an Xconomist). The company is developing a bioengineered material, called STAR, that has lots of pores that allow blood vessels and other tissues to grow and promote healing around an implanted medical device, like a pacemaker, for instance. The company has had a busy year since getting the first wad of cash. It has nailed down 14 commercial research agreements with partners who want this technology for a wide range of devices for obesity, diabetes monitoring, wound care, human aesthetics like breast implants, and doing infusions. Back in September, I wrote about one deal with Chandler, AZ-based TR BioSurgical, which is using the Healionics method for a glaucoma implant for dogs. That transaction could bring $10 million in revenue for Healionics.
“We are pretty pleased to have done this, considering what’s going on with the economy,” said CEO Robert Brown, in a phone interview. The cash will be used to plow ahead toward company goals of doing additional animal studies, and developing a degradable form of STAR material that will be more versatile, he said.
This financing shouldn’t come as too much of a surprise, despite the current downturn. Healionics got rave reviews from the Alliance of Angels back in July, as I reported in this conversation with Technology Alliance executive director Susannah Malarkey. The company’s business model doesn’t require the many years, and many millions, that traditional biotechs do, so it was an idea that appealed to angels, she said. “This is one of the most interesting life sciences deals we’ve seen where angels can participate,” Malarkey said at the time.
If things break right for Healionics, dogs will help create a cash stream that will lead to people. The deal with TR BioSurgical could start generating royalties as soon as the first quarter of 2009, when the product becomes available for sale. The dog glaucoma product is supposed to help prevent shunt-like implants from getting clogged with fluid buildup, which can cause pain after just two or three months. If this technology is proven to help promote healing around those shunts in dog eyes, then it will clear the way for further tests in people with glaucoma. It’s the second-most common cause of blindness in the U.S., affecting an estimated 2.2 million people and counting as the population ages.
The financing will be used to enhance a next-generation form of the STAR technology, in a degradable form, Brown says. That can be an advantage for cosmetic treatments. Instead of getting collagen implants, which generally only last a few months, the degradable Healionics product could form a pore-laden scaffold that allows healthy tissue to fill in around it, taking the place of collagen. This way, patients could get plumper lips or wipe away their wrinkles, without having to go in for repeat procedures with an artificial material injection, Brown says.
Healionics is one of about a half-dozen companies that spun out of the University of Washington Engineered Biomaterials center, an 11-year, $40 million effort funded by the National Science Foundation. Ratner led the group, which had a mission of showing Congress the money is going to good use, as he explained to Greg back in August. I’m pretty sure the good folks in D.C. will get to hear about this angel financing as one sign of proof the government’s money was well-spent.