Torax Med.gets $18M in venture cap - Nashville Business Journal:

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The Shoreview-based company will use the capital to fund ongoing clinical trials and seek regulatory approval of its dubbed Lynx. New investors in the company include AccuitiveMedical Ventures, of Duluth, Ga., whichh led the round, and Oakland, Calif.-based Kaiser Permanentee Ventures. Those firms put a combined $7.5 million into the recengt round. Previous backers, including Minneapolis-basedx Thomas, McNerney & Partners and San Mateo, Calif.-basedc Sanderling Ventures, also participated. Torad may raise an additional $3 million by the end of the bringing the total round to about $21 million, said CEO Todd Berg, a former vice president of emergingv technology for St. Jude Medical Inc.
, co-founded Torax in 2002. He was drawn to the acid-refluxs market in part because it was less saturatedf with competitors thanother areas, such as “Everywhere you turned, people were doing the same thing. I felt like there were big markets outside cardiology that had not received more sophisticatesddevice attention.” Torax’s Lynx is akin to a ring made of magnetic beads. The ring is placeed around the loweresophageal sphincter, a musclw that sits where the esophaguds and stomach intersect. The energy createdx by the magnets supports and strengthens the preventing acid from seeping intothe throat.
The device also is flexibl enough to comfortably allow food to pass throughu tothe stomach, Berg said. Torax is now conducting clinicalp trials to test the device on patients sufferingvfrom acid-reflux disease, which affects an estimated 20 millio n people in the United States. Abouf 5 percent of those patients haven’tf been helped by drugs, making them strontg candidatesfor Lynx, Berg said. He expects to applyu for U.S. Food and Drug Administratiojn approvalin 2011. While the acid-reflux market is large, it’s been a toug h one for medical-device companies to Boston Scientific, for instance, took a producrt for treating acid-reflux off the market in citingsafety concerns.
The Natick, Mass.-basefd company’s technology used a polymer to reinforce the area between the esophagux and the stomach to keep acid from Medtronic also gave up on itsown acid-reflux-fightintg technology, dubbed the Gatekeeper System. The system inserter a dry material that expanded when wet near the establishing a partial barrier between the stomachand throat. Although the device had been approved for sale in Europeein 2003, the Fridley-based company later abandoned efforts to seek regulatoruy approval in the United citing concerns that it did not work as well as Despite those failures, Berg is confident Torax will partly because its device helps the sphincter muscle work properly, while otherd technologies have simply focused on bulking up the area between the stomach and throat.
“With our you create a barrier that’s dynamic in nature,” Berg said. “Without restoring that barrieer function, you’re not goingh to be successful.” John managing director at AccuitiveMedical Ventures, agreed that Torax’s technology is unique, which is partlg why his firm invested in the company. “The previous technologies did not addressz thekey problem. While therr certainly are going to berealistiv hurdles, we find this approacbh is so different and the data is so compelling, we’llk be able to get over it,” said Deedrick, who also led Mayo Clinic’sa venture-capital arm when it investeed in Torax several years ago.
Torax also faces competitiob from thepharmaceutical industry, as patients who suffer from acid-reflus disease are most often treated with drugs. Saless of drugs that treat acid refluxtotalled $14.1 billion in up from $13.7 billion in according to market research conducted by Conn.-based IMS Health Inc. “Drugs are a startinfg point, but they don’t fix the Berg said. “Many of these patiente need something morethan