Fair Winds or Foul in Treating Total Occlusions?
This article was originally published in Start Up
The company that did the largest private financing last years was, surprisingly, Wilmington, MA-based OmniSonics Medical Technologies. The company is developing an innovative technology that uses acoustical energy to break up clots, plaques, and other occlusions wherever they occur in the human vasculature. OmniSonics' Series C financing will ultimately wind up raising a total of $44 million. The company's first approval, expected later this year, will come in treating peripheral disease, but the golden ring is clearly coronary arteries and that includes chronic total occlusions, a challenge that has been particularly vexing for both interventional cardiologists and medical device developers. Indeed, the recent news that CTO start-up Lumend Inc. is significantly scaling back its operations is a case in point.
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For many device companies and their investors, drug-eluting stents have come to represent a kind of technological end-game, a device so successful at solving an important unmet need that all future opportunities lie elsewhere. But, in fact, there are still many important unsolved problems in interventional cardiology, not the least of which is chronic total occlusions, lesions so thick and dense that blood can't flow through the artery. That's the problem LuMend has set out to solve and it has the first US-approved device on the market. And while some question the company's timing, LuMend officials argue they couldn't be better timed, since their device and drug-eluting stents go hand in hand.
Innovative device companies have always had to contend with the Sword of Damocles of unexpected technological obsolescence, but for would-be developers of interventional devices for the prevention of restenosis, the sword is dangling perilously close. In the RAVEL trial, a 238-patient clinical trial on a drug eluting stent, treated patients experienced 0% restenosis compared to 26% in the control group. Now, device developers with alternatives to stents reposition themselves to sustain businesses in the face of potentially shrinking target markets. Many argue that they will serve certain applications better than stents; others hope to work with drug-coated stents to enhance performance, many believe that economics will leave room for alternative approaches, and still others are getting out of the coronary business entirely.
Two years ago, OmniSonics, a small medical device firm with a promising application in BPH, ran into a brick wall in discussions with investors; some of that was due to dot-com mania, but investors also evinced distaste for the urology and gynecology markets. A poor industry track record, compounded by reimbursement troubles, cautious physician adopters, and patients sometimes reluctant to seek treatment, had left earlier investors in the space feeling burned. But there's reason to hope that investor skittishness will begin to fade. Not only is the market driven by strong demographics, but also social and cultural taboos are coming down. For all its problems, for many device companies, particularly for large ones, the opportunity in urology and gynecology may soon become too attractive to turn down.