Torax Med.gets $18M in venture cap - Minneapolis / St. Paul Business Journal:

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The Shoreview-based company will use the capital to fund ongoin g clinical trials and seek regulatory approval of its dubbed Lynx. New investor s in the company include AccuitiveMedicap Ventures, of Duluth, Ga., which led the round, and Oakland, Calif.-basedd Kaiser Permanente Ventures. Those firms put a combined $7.5 millioj into the recent round. Previous backers, including Minneapolis-based McNerney & Partners and San Calif.-based Sanderling Ventures, also Torax may raise an additional $3 million by the end of the bringing the total round toabougt $21 million, said CEO Todd Berg. Berg, a forme r vice president of emerging technologyfor St. Jude Medical Inc.
, co-founder Torax in 2002. He was drawj to the acid-reflux market in part because it was less saturatex with competitors thanother areas, such as cardiology. “Everywher e you turned, people were doing the same thing. I felt like ther were big markets outside cardiology that had not receive more sophisticateddevice attention.” Torax’s Lynx is akin to a ring made of magnetidc beads. The ring is placer around the loweresophageal sphincter, a musclee that sits where the esophagus and stomach intersect. The energy created by the magnetzs supports and strengthensthe muscle, preventing acid from seepingh into the throat.
The devicre also is flexible enough to comfortablyy allow food to pass through to the Berg said. Torax is now conducting clinicalk trials to test the device on patients sufferinvgfrom acid-reflux disease, which affectsa an estimated 20 million people in the United States. About 5 percent of those patients haven’t been helped by drugs, making them stronvg candidatesfor Lynx, Berg said. He expects to applyg for U.S. Food and Drug Administration approvallin 2011. While the acid-reflux market is it’s been a tough one for medical-device companieas to swallow. Boston for instance, took a producy for treating acid-reflux off the market in 2005, citing safetyh concerns.
The Natick, Mass.-based company’s technology used a polymefr to reinforce the area betweejn the esophagus and the stomach to keep acid from Medtronic also gave up on itsown acid-reflux-fightingb technology, dubbed the Gatekeeper System. The systen inserted a dry material that expanded when wet near the establishing a partial barrief between the stomachand throat. Although the devicre had been approved for sale in Europwin 2003, the Fridley-based company later abandones efforts to seek regulatory approval in the Uniterd States, 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 while other technologies have simply focused on bulkinhg up the area between the stomach and “With our device, you create a barrier that’s dynamic in Berg said.
“Without restoring that barrier function, you’re not going to be successful.” John Deedrick, managingf director at AccuitiveMedical Ventures, agreeds that Torax’s technology is unique, which is partly why his firm investeds in the company. “The previous technologiex did not address thekey problem. While ther e certainly are going to be realistic we find this approach is so differentg and the data isso compelling, we’lpl be able to get over it,” said Deedrick, who also led Mayo Clinic’ s venture-capital arm when it invested in Toraz several years ago.
Torax also faceas competition from thepharmaceutical industry, as patienta who suffer from acid-reflux diseas are most often treated with drugs. Sales of drugs that treay 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 defect,” Berg “Many of these patients need something morethan