Getting venture financing is extremely difficult for medtech companies in the current climate, but one group that does not seem to have a problem is the neurostimulation specialist CVRx. The company has raised $93m in equity this year – the third-biggest round of 2016 to date – plus $20m in debt (see table below).
CVRx is developing an implantable device for treating heart failure and hypertension, diseases poorly served by current drugs. So it is no wonder it has seen interest from big pharma, counting Action Potential Venture Capital – a specialised venture arm of GlaxoSmithKline – and Johnson & Johnson Innovation among its investors. “J&J has invested in every single round of financing since 2007,” CVRx's chief executive, Nadim Yared, tells EP Vantage.
|Top five medtech VC rounds of 2016*|
|Flatiron Health||Healthcare IT||Series C||175.0|
|Guardant Health||In vitro diagnostics||Series D||100.0|
|Acutus Medical||Cardiology||Series C||75.0|
|Heartflow||Cardiology diagnostics||Series E||64.0|
|*As at August 15, 2016|
But developing devices for these indications has not always been smooth. “There have been some failures in the past in this field, caused by our lack of understanding of the neural system and how to address it,” Mr Yared concedes.
One of these failures involved renal denervation, a technique in which nerves were ablated using radiofrequency energy delivered through the veins – different from the direct electrical impulses used in neuromodulation – which was being developed for hypertension and was the subject of much excitement until Medtronic’s Symplicity HTN-3 trial crashed.
CVRx’s device, Barostim neo, has a similar premise to renal denervation, with both aiming to correct over-activity in the sympathetic nervous system. The body initially activates this system to compensate for the ailing heart, but it eventually contributes to disease progression.
However, renal denervation only acts on one element of the system. Ablating the renal nerves removes the sympathetic stimulation to the kidneys, “and they start excreting fluid. And by reducing the amount of fluid [still in the body], you reduce the pressure, you reduce the afterload on the heart. It acts like a permanent non-toxic diuretic,” Mr Yared says.
That was the theory behind renal denervation, true, but as Mr Yared himself points out, the technology failed.
Barostim neo takes aim at the root cause of the problem, “changing the information heading from the carotid artery to the brain”. The device stimulates the baroreceptors in the neck, “tricking the brain into believing the sympathetic vagal tone is way more imbalanced than what the brain thought was the ideal set point”, he explains.
“The reaction from the brain is multisystemic. The brain dilates the arteries; it shifts some of the blood from the arterial to the venous system; it dilates the venous system, increasing the capacity of that reservoir; it reduces the heart rate; it asks the kidneys to stop retaining fluid and start excreting more fluid from the body.”
Barostim neo is CE marked in Europe for resistant hypertension and heart failure patients with an ejection fraction under 35%, and is already reimbursed in some countries including Germany.
Approval in the US, where it is being assessed via the expedited access pathway, is still a few years away. CVRx is enrolling patients into a pivotal trial, BeAT-HF, in heart failure. “It will probably be two years before we see symptomatic data, and maybe three to four years for some of the outcome data,” says Mr Yared.
The company has decided to focus on heart failure first in the US rather than hypertension because “the heart failure target market compared [to hypertension] is almost twice as large, and the health economic equation for heart failure patients is easier to demonstrate, because of the cost of treatment. And the urgency of treatment in HF is much higher than in hypertension.”
Again, Mr Yared is confident that CVRx will avoid the missteps that contributed to the failures in renal denervation, and points out that pivotal trials of the latter used “a different generation of the technology, and there were changes in the patient criteria, endpoint designs, and the trial structure itself. We’re using absolutely the same device, and our phase II and phase III studies have a very similar design.”
As for the competition, “there are some people trying but most of them are way behind us. The usual suspects are doing some smaller acute feasibility tests. To our understanding, in the field of neuromodulation for heart failure, we’re the only company doing a trial in humans with implantable devices.”
CVRx could go up against Galvani Bioelectronics, the recently announced joint venture between Glaxo and Google’s life sciences arm Verily (Interview – Galvani wants to get on patients’ nerves, August 4, 2016).
But Galvani’s main focus is in diabetes and other metabolic disorders, and Glaxo is also an investor in CVRx, so seems just as likely to be a suitor as a rival.
When asked about the prospects of a takeout, Mr Yared is coy. But he is also realistic that CVRx likely has work to do before an acquisition is on the cards. “We’re the first in this field – but there’s still a long road ahead of us.”