Interview – Big money from big names for Acutus
Securing $75m in venture capital is no mean feat in a tricky environment, but in March Acutus Medical pulled off the third largest medtech VC round of 2016 so far. The company has developed a system that maps out the chambers of the heart to guide cardiac ablation, used to treat atrial fibrillation – and it can even show doctors whether the technique has worked.
“We have real-time visualisation of atrial fib, we have real-time verification of therapy – these things are not available with current technology on the market,” Acutus’s chief executive, Randy Werneth, tells EP Vantage. The AcQMap system was CE-marked a month ago and is expected to hit the US next year – so Acutus’s investors, which include GE Ventures, might not have long to wait for a return.
The AcQMap – it is pronounced "accu-map" – is a catheter tipped with 48 ultrasound transducers arranged in a sphere. It is inserted into the upper chambers of the heart to produce a constantly updated 3D map of the organ, displayed on a computer. The catheter also incorporates 48 electrodes that track electrical activity in the heart.
The ultrasound imaging produces an image of similar quality to a CT scan, Mr Werneth says – much better than what is available with current technologies, many of which have been relatively unchanged for 20 years or more. But the electrical activity map is perhaps a more important advance, displaying to the electrophysiologist the propagation through the heart’s chambers of the electrical impulses that cause the heart to beat.
This enables the doctor to understand the source of the patient’s arrhythmia, Mr Werneth explains. “The old technology doesn’t allow the physician to know, is this the cause of the arrhythmia or the result of a problem somewhere else and I’m just seeing the effects of it as it propagates through the atrial chamber?”
Mr Werneth says there have been cases where the technology has allowed electrophysiologists to see the effect of therapy while the patient is still undergoing the procedure.
“Within a very short time, going from ablation to ablation, you start to see the chamber organise and we’re seeing a very high rate of conversion to sinus rhythm, right there on the table. Current technology can’t do that,” he says.
|Top five medtech VC rounds of 2016 to date|
|Jan 6, 2016||Series C||Flatiron Health||Healthcare IT||175.0|
|Jan 7, 2016||Series D||Guardant Health||In vitro diagnostics||100.0|
|Mar 22, 2016||Series C||Acutus Medical||Cardiology||75.0|
|Jan 7, 2016||Series B||Exosome Diagnostics||In vitro diagnostics||60.0|
|May 26, 2016||Undisclosed||TransMedics||General & plastic surgery||51.2|
There is no similar technology in development, Mr Werneth says, and certainly nothing like AcQMap on the market. And with atrial fibrillation sorely undertreated, the market could be set to grow.
There are around 13 million symptomatic AF patients, around 3% of whom are treated today, he says. This is partly because it is hard to know how long an ablation procedure will take with current technology. It usually takes between three and five hours, but because doctors cannot be more precise hospitals cannot schedule efficiently. “Our technology will give them more predictable procedure times and higher efficacy,” Mr Werneth says.
“The market has been growing at double-digit rates for five years at least, and it’s anticipated to continue for the next five years,” he says, adding that electrophysiology could follow the explosive growth trajectory of interventional cardiology.
The company is not yet disclosing the price of AcQMap, but typical reimbursement for devices is usually around $4,500 to $5,000. With 3% of 13 million patients currently being treated that gives a market value approaching $2bn.
This market potential was instrumental in helping Acutus raise its $75m. One of the participants was GE Ventures, the corporate VC arm of General Electric. But Mr Werneth says this does not indicate an interest in buying Acutus on GE Healthcare’s part.
“They’ve made it very clear to us that they’re not potential acquirers,” he says. None of the company’s venture backers “have any rights to anything. Every investor is stock only.”
|Acutus Medical's VC funding|
|Mar 22, 2016||Series C||75.0||Advent Life Sciences, Deerfield Management, GE Ventures, OrbiMed Advisors, Xeraya Capital|
|Sep 30, 2014||Series B (third close)||26.2||Undisclosed|
|Aug 20, 2013||Series B (second close)||7.0||OrbiMed Advisors, Advent Venture Partners, GE Capital, Index Ventures|
|Jun 25, 2013||Series B||21.0||OrbiMed Advisors, Advent Venture Partners, Index Ventures|
|Jan 20, 2012||Series A||5.4||Advent Venture Partners, Index Ventures|
|Aug 8, 2011||Seed capital||1.0||Index Ventures|
Deerfield and OrbiMed, two VC funds that have been known to make crossover investments, also participated in the series C. Does this mean an IPO is on the cards? Mr Werneth says yes – in time.
“Our plan is to remain a standalone company and to grow into an IPO,” he says. “There’s this big vacuum created by all the large acquisitions, so we want to grow and fill that void.” The company is aiming to float in 2018 on either Nasdaq or the NYSE, though the markets will have to buck their ideas up before that path becomes realistic.
US next year
In the short term the company will begin commercial launch in Europe but simultaneously begin a European trial in persistent atrial fibrillation in order to “show what AcQMap can do in comparison to other systems on the market”.
It is also pushing towards the US, and believes that it can gain initial market clearance by the middle of next year. Acutus plans to seek a 510(k) for the diagnostic use of the catheter, enabling a fairly rapid source of US revenue. It will follow this up with an FDA-sanctioned trial aimed at getting premarket approval for therapeutic use.
This timetable is ambitious, and the idea that electrophysiology will take off in the same way as interventional cardiology is optimistic. Still, Acutus has hooked big money from some big names – and without its technology yet approved in the US. This is an achievement worth noticing.