Satsuma Pharmaceuticals, HistoSonics and Bardy Diagnostics: Behind The Deals with Lumira Ventures

May 16, 2019 | By: Jon Jackson

In a CVCA Central first, we spoke with Lumira Ventures to go behind the scene of three of their recent deals.

On April 8, Michigan-based medical device company HistoSonics, announced it had raised USD $54 million in a Series C financing including participation from Lumira Ventures. HistoSonics is a venture-backed medical device company developing a non-invasive robotic platform and novel beam therapy, Robotically Assisted Sonic Therapy (RAST™).

On April 16, Seattle-based Bardy Diagnostics announced it had raised USD $35.5 million in Series B funding from a syndicate of investors which included participation from Lumira Ventures. Bardy Diagnostics is an innovator in digital health and remote patient monitoring, with a focus on providing the most diagnostically accurate and patient-friendly cardiac patch and other monitors to the industry.

On April 24, California-based Satsuma Pharmaceuticals announced it had raised USD $62M from a syndicate that included participation from Lumira Ventures. Satsuma Pharmaceuticals is a clinical-stage biopharmaceutical company focused on developing STS101 as an important and differentiated therapeutic option for the acute treatment of migraine.

The CVCA caught up with Gerry Brunk, Managing Director, Lumira Ventures, to talk about these three deals and the waves they are making in the Life Sciences sector.

HistoSonics 

Why did Lumira choose to invest in HistoSonics?
HistoSonics is targeting a significant unmet medical need, solving non-invasively the key limitations of existing surgical, radiation and ablation therapies for cancer and other conditions.  The company is unique in the medical device field as it has “platform” potential yielding multiple applications, and IP control across multiple high-growth therapeutic areas (oncology, neurology, urology, vascular/cardio).   The company has shown compelling early clinical evidence that supports 2019 FDA approval and commercial launch.   We were also attracted to the leadership team, which has direct experience commercializing platform devices and driving high-value venture exits. Finally, the company is a strong fit with our strategy of targeting best-in-class company located in secondary geographies of North America (in this case, Michigan), and Lumira can add meaningful value to the company given our experience in surgical robotics, surgical navigation and medical imaging.

What will the invested dollars be used for?
HistoSonics plans to use the proceeds of the financing to complete key regulatory and commercial milestones and expand development of its breakthrough platform.

Where did you hear about HistoSonics?
We have followed HistoSonics since 2011 and continued to evaluate it over the years as part of our long-standing thematic focus targeting the fields of medical robotics and oncology.

What is your anticipation about this sector in the short term and long term?
The interventional oncology and surgical robotics sectors have been among the most active fields for high-valued acquisitions and public offerings over the past several years, a trend expected to continue as healthcare providers seek more effective and lower cost treatments for cancer.

Is there anything particularly interesting about this financing round with HistoSonics that you’d like to emphasize?
Our syndicate partners in the $54 million financing include strategic co-investors Varian Medical Systems (a $12 billion leader in radiation therapy and oncology solutions) and Johnson & Johnson (which acquired the prior company of HistoSonics’ CEO). Co-investing with us was robotics pioneer Dr. Fred Moll, founder of Intuitive Surgical, CEO of Auris Health (recently acquired by J&J), and former chairman of Lumira portfolio company MAKO Surgical (acquired for $1.7 billion).

What is your exit horizon on this deal?
3-4 years

Tell us about the individual at Lumira that was involved in this deal.
Gerry Brunk, Peter van der Velden and Lu Han led the financing from Lumira. Each have experience investing in and building commercial-stage companies in the field of interventional oncology, and Mr. Brunk joined the board of HistoSonics as part of the investment, where he will leverage Lumira’s past experience as a board member of MAKO Surgical.

Bardy Diagnostics

Why did Lumira choose to invest in Bardy Diagnostics?
Bardy Diagnostics (BardyDx) is competing and innovating in the largest, most acquisitive established sector of cardiovascular medical devices, heart rhythm disorders. The company has a clinically validated superior product fast-following and stealing share from a category pioneer who has laid the foundation of clinical utility, physician economics and reimbursement driven by value-based evidence. The company’s founder and CEO Dr. Gust Bardy is one of the most widely regarded physician-entrepreneurs in the field, having sold his last company Cameron Health to Boston Scientific for $1.2 billion. BardyDx has demonstrated market adoption and rapid revenue growth and is a strong fit with Lumira’ s strategy backing best-in-class companies in secondary geographies (in this case, the Pacific Northwest).

What will the invested dollars be used for?
Proceeds from the $35 million financing will be used to expand the company’s sales force and monitoring services, and to support advanced development programs, including augmented intelligence and visualization technologies.

Where did you hear about Bardy Diagnostics?
Lumira has a long-standing franchise and thematic focus in the field of cardiovascular medicine, and BardyDx is one of many companies we have evaluated over a multi-year period in the field of remote cardiac monitoring.

What is your anticipation about this sector in the short term and long term?

Millions of people experience diverse cardiac arrhythmias every year, with 1 in 4 adults over the age of 40 at risk of developing an irregular heartbeat that will ultimately require accurate diagnostic monitors to properly guide medical therapy. The field of remote cardiac monitoring is expected to grow dramatically due to these patient demographics and the emergence of detection solutions and AI-enabled data analytics previously unavailable but now being pioneered by companies like BardyDx.

Is there anything particularly interesting about this deal that you’d like to emphasize?  Over 45,000 patients have already successfully used the company’s Carnation monitor, and our co-investors included the strategic venture capital arms of several of the largest U.S. hospital systems (who have validated the clinical and economic value of the product), as well as an investing affiliate of the American Heart Association.

What is your exit horizon on this deal?
2-3 years

Tell us about the lead at Lumira involved in this deal.
Gerry Brunk, Daniel Hetu and Peter van der Velden led the financing from Lumira. Each have experience leading growth equity investments in commercial-stage medical device companies, and Mr. Brunk joined the board of BardyDx as part of the investment, where he will support the company using Lumira’s deep network and past experience building multiple successful cardiovascular companies.

Satsuma Pharmaceuticals

Why did Lumira choose to invest in this Satsuma Pharmaceuticals?

Over 40 million people in the U.S. and Canada suffer from migraines, a leading cause of disability and direct and indirect medical costs.   There are few effective therapies available to treat an acute migraine attack.  Satsuma is developing a compact, simple-to-use, self-administered, and non-injectable nasally inhaled form of the approved intravenous migraine drug DHE, enabling a larger number of people with migraines to realize the long-recognized therapeutic benefits of DHE therapy.

What will the invested dollars be used for?
Proceeds from the $62 million financing will be used to complete a Phase 3 study and file for marketing approval.

Where did you hear about Satsuma?

Lumira has followed the development of Satsuma since its inception and Series A financing, as part of our thematic interest in novel, non-opioid pain therapeutics.

What is your anticipation about this sector in the short term and long term?

The field of migraine therapies and non-opioid pain medicines enjoys a favorable environment for go-public transactions and M&A. Multiple well-capitalized new entrants in the migraine therapeutics space are establishing commercial infrastructure and seeking to acquire differentiated late-stage assets like those being developed by Satsuma.

Is there anything particularly interesting about this financing round with Satsuma that you’d like to emphasize?
The over-subscribed financing syndicate was primarily comprised of public equity investors, including Wellington Management, RA Capital, Cormorant, Eventide and TPG.

What is your exit horizon on this deal?
2-3 years

Tell us about the individual at Lumira that was involved in this deal.
Lumira’s team has a broad base of experience investing in the fields of neurology, pain therapies and drug delivery.

 


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