Oct 29, 2014
Global Healthcare Company Building Leading Catheter-Based Electrophysiology Franchise
Atrial fibrillation (AF), a type of heart rhythm disorder that affects well over 30 million people around the world, is an increasingly common disease. The burden of AF on a growing number of patients and its associated healthcare costs have spurred a race among large medical device companies to develop comprehensive portfolios of diagnostic and therapeutic solutions to address this large and growing unmet medical need. This opportunity also captured our attention at NEA, and over the course of the last several years, we have expanded our relationships in this market and made select investments in three AF medical device companies: Topera, Advanced Cardiac Therapeutics, and VytronUS.
We believe NEA’s portfolio of AF medical device companies and the teams behind them collectively represent a bright future in which the growing global burden of cardiac arrhythmias, including AF, can be treated through procedures that provide better outcomes for their patients, are easier for electrophysiologists to perform, and result in lower costs for the healthcare system.
Abbott, a world leader in developing and marketing innovative medical devices, seems to agree, and today announced a bold entry into the field of catheter-based electrophysiology, first by acquiring Topera for $250 million upfront plus more in potential future payments tied to performance milestones. Second, Abbott has secured a right to purchase Advanced Cardiac Therapeutics in the future upon completion of key milestones. As Abbott positions itself strategically with these technologies, it has also tapped an NEA portfolio CEO, Mike Pederson of VytronUS, to lead its franchise in this market. Last but not least, VytronUS has raised a new $31.6 million oversubscribed round of financing led by a strong syndicate of new venture capital investors including a minority equity investment by Abbott Ventures.
With NEA as the largest institutional investor in each of these companies—and the only investor to be involved in all three—we are proud to share some insight into this seemingly unprecedented suite of transactions that, for the first time in the medical device sector’s history, feature a large corporate acquirer partnering with multiple portfolio companies in a single VC’s portfolio to establish a path to building a market leader in a major diagnostic and therapeutic category.
In April 2013, NEA made its first investment in Topera alongside Abbott Ventures as a strategic investor. Since its founding by Drs. Sanjiv Narayan and Ruchir Sehra, Topera’s mission has been to become the recognized global leader in identifying the areas of the heart that perpetuate complex arrhythmias like atrial fibrillation to enable patient-specific solutions with its proprietary technology. Today Topera is pioneering the practice of providing tailored ablation strategies for patients by enabling rotor identification. The Topera System, which consists of the RhythmView™ workstation and the FIRMap™ diagnostic catheter, bears FDA clearance and CE Mark approval and has generated significant attention in the clinical community through over one hundred peer-reviewed, published papers and abstracts presented at scientific conferences. Through September 2014, Topera’s technology has been used in over 1,400 procedures to identify the areas of the heart that sustain serious heart rhythm disorders so they can be successfully targeted for therapy. We are thrilled to have partnered with this passionate team whose game-changing technology should further flourish as a part of the Abbott family, and pleased that this outcome will be an excellent return for our investors.
Advanced Cardiac Therapeutics
In April of this year, NEA led a round of financing in ACT to help drive an execution-focused development plan that would position ACT’s TempaSure™ catheter as a best-in-class irrigated radiofrequency ablation catheter with the added benefit of ACT’s proprietary temperature-sensing capability. With the leadership of Chairman Duke Rohlen (previously the CEO of CV Ingenuity, also an NEA company), along with high-quality advisors and industry expert directors like Mike Pederson and Roy Tanaka, ACT recruited several talented industry veterans to its engineering and technical ranks and has been hitting on all cylinders. ACT’s partnership with Abbott finances their business plan, and could position NEA and other investors for a potential >10x return on our invested capital.
NEA first invested in VytronUS and became its largest shareholder in late 2007, and since that time the company has remained relatively quiet about the ambitions of its program. As presented publicly for the first time at last year’s Heart Rhythm Society meeting, VytronUS has developed a next-generation catheter ablation system that harnesses the capabilities of ultrasound energy to both visualize and ablate tissue by making non-contact, continuous lesions. Even more remarkable, VytronUS’s catheter-based technology is enabled by highly precise robotic navigation, which is designed to level the playing field for electrophysiologists, where producing complex lesion sets may be performed with the ease and consistency of a robotic platform. VytronUS has been led by a seasoned team of industry veterans including CEO Mike Pederson, an outstanding leader who possesses the rare combination of strong technical chops, customer-first commercial instincts, and great people skills. Mike has driven outstanding progress at VytronUS, and we’ve also benefitted tremendously from his contributions to ACT’s board as an outside industry director. Proceeds from VytronUS’s new financing will support VytronUS’s proprietary Low-Intensity Collimated Ultrasound (LICU) Cardiac Mapping & Ablation System to treat atrial fibrillation and other arrhythmias in forthcoming clinical trials. Needless to say, we anticipate more great things from VytronUS in the future.
Any success in our investments in the AF catheter ablation market is in no small way attributable to NEA’s team-centric approach to partnering with entrepreneurs, and that includes my partners Ryan Drant and John Nehra as well NEA venture partner Jay Graf who have all provided terrific support to these companies, as well as NEA’s internal legal and accounting teams and the outside firms who advised each company involved in these transactions.
We congratulate Abbott, Topera, Advanced Cardiac Therapeutics and VytronUS on their outstanding progress and promising futures. NEA is proud to be their partner, and is enthusiastic to continue supporting their shared vision of developing new paradigms for the diagnosis and treatment of heart rhythm disorders.