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12 Private Medtech Companies That Are Crushing It

  • Medtech analysts seem to be paying a lot of attention this year to private medical device companies. Earlier this year Canaccord Genuity's Jason Mills called attention to 16 potentially disruptive medtech companies in the private sector.

    "Our research suggests there are a plethora of high-quality, highly-innovative and potentially disruptive medical technology companies in the private sphere, many of whom could explore the IPO route over the next several quarters," Mills wrote in that report. "It’s never too early for investors to start learning about these compelling stories."

    Then, in March, Needham & Co.'s Mike Matson highlighted six noteworthy private medical device companies he has found interesting this year. Now, Matson has released a new list that adds six more companies that have caught his eye.

    Without further ado, here is a full list of all 12 companies that Matson says investors may want to keep an eye on, along with his personal takeaways from meetings he's had with each company's management team.

  • 4C Medical Technologies 

    4C Medical Technologies is developing the AltaValve, a transcatheter mitral valve replacement (TMVR) platform designed to address mitral regurgitation. According to the Brooklyn Park, MN-based company, it is the first transcatheter mitral regurgitation (MR) therapy that directly addresses MR without replacing the native mitral valve, thus preserving the native mitral annulus and left ventricle. 4C said its device is positioned supra annular to the leaking native mitral valve to stop the leak from entering the left atrium. Its atrial-only fixation ensures minimal disruption to critical cardiac structures within the left ventricle including the chordae tendineae and the left ventricular outflow tract, the company said. 4C Medical's initial focus is to develop a therapy for MR, and subsequently for tricuspid regurgitation.

    "The current system is delivered transapically but management expects a transseptal design to be completed in June 2019," Matson noted in his June 5 report.

    This company also caught Mills' attention earlier this year as it was included on a list of private companies he highlighted in a research note earlier this year.

    "AltaValve holds the potential to treat up to 60% to 70% of TMVR patients, in management’s view, compared to the [approximate]10% to 40% rate able to be addressed by competitive TMVR platforms," Mills wrote in that report.

    Image Credit: 4C Medical Technologies Inc.
  • Active Implants

    "Active Implants has commercialized two unique orthopedic implants in Europe with a visible pathway to bring them into the U.S.," Matson noted in his report. "In particular, it [is] seeking FDA approval of its NUsurface Meniscus Implant which is the first 'artificial meniscus' and intended to fill the gap between minimally invasive meniscus repair and total knee replacement."

    In the United States, Active Implants has enrolled two clinical trials and Mills' report puts the total addressable U.S. market at about $5 billion.

  • Cerapedics

    "Cerapedics i-Factor is a differentiated peptide enhanced bone graft (a drug/device combination with a PMA approval). i-Factor is currently FDA approved for use in cervical fusion and Cerapedics is running a trial to support a lumbar fusion indication," Matson said.

    He also noted that i-Factor is now commercialized in the United States, the company doubled its sales in 2018 and expects to grow more than 50% in 2019.

  • Coventus Orthopedics

    "Conventus Orthopedics has developed an innovative 3D cage-like fracture management system that enables minimally invasive treatment of shoulder, wrist, and elbow fractures," Matson said in his report. "The Conventus Cage was launched in 3Q18 and management plans to launch more products in 2020 and beyond."

    That's where the company is at now, but to fully appreciate this company's success, it's worth taking a look back at the year 2013 when Covnentus nearly shut down despite having already brought its device through the FDA clearance process.

    FDA cleared the company's implant for wrist fractures in January 2013, a device that was inspired by the world of interventional cardiology. But as most medical device companies are well aware, it takes a lot of cash to bring a medical device through the U.S. regulatory process. So soon after getting that first FDA clearance, Conventus ran out of money.

    It was a common problem in the industry at the time (and still is today), investors wouldn't invest until the company's device was FDA cleared. That created an even bigger problem when what was predicted to be a straight-forward 510(k) turned into a three-year process.

    By the time Conventus finally achieved that regulatory milestone, the company's original and largest investor had moved away from investing in medical device startups and declined to make further investment in Conventus. Then CEO Paul Hindrichs had a tough time attracting new investors who were spooked by the fact that TPG had stopped investing in the company.

    It wasn't until Paul Buckman, who had been a board member since the company’s founding, took over formally as CEO in October 2013, that the financial clouds began to recede, as MD+DI reported at that time. In a 2013 interview, Buckman told MD+DI that investors warmed to his commercial background (as opposed to the previous CEO, who had a more technical background). He was previously president of St. Jude Medical's cardiology division and later its corporate vice president of business development, and he was able to tap into some of his business contacts to help raise money for Conventus.

    Currently, the company has a healthy roster of investors, according to Conventus' website.

  • Intact Vascular

    "Intact Vascular’s TACK system is designed to repair peripheral arterial dissections which can occur after a percutaneous transluminal angioplasty (PTA)," Matson noted. "The above-the-knee (6 French) system recently received FDA approval and Intact Vascular has fully enrolled the pivotal trial for its below-the-knee (4 French) system and plans to launch it in the [U.S. market in the second-half of 2020]."

  • St. Teresa Medical

    St. Teresa Medical’s SurgiCLOT hemostatic dressing is currently indicated for cancellous bone bleeding in orthopedic and cardiothoracic surgeries, Matson said in his report. 

    "Longer-term, management plans to bring its FASTCLOT platform to dura repair [targeting commercial launch outside the U.S. market in 2020], high-volume arterial/venous bleeding, and soft tissue (e.g. liver, spleen) coagulation," Matson reported.

  • CardioFocus

    CardioFocus has developed a balloon-based atrial fibrillation (AF) ablation system designed to enable direct visualization. The company's HeartLight technology uses titratable laser energy, setting it apart in a market that is best known for using radiofrequency or cryoablation to ablate heart tissue.  Matson also noted in his earlier report that HeartLight includes a reusable 2 French endoscope to provide direct visualization as the ablations are performed.

    It's easy to see why the analyst chose to highlight CardioFocus. The company's HeartLight X3 system received a CE mark in March,  

    CardioFocus’ HeartLight X3 System reached a major milestone in March by receiving CE mark. Then, in April, the company presented positive data from a pivotal confirmatory study of the Heartlight X3, which demonstrated superior procedural time compared to the first-generation product. Just last week CardioFocus reported that it had completed a $55 million financing.

  • EndoGastric Solutions

    Both Maston (Needham & Co.'s medtech analyst) and Mills (Canaccord Genuity's medtech analyst) have taken note of EndoGastric Solutions (EGS) this year.

    EGS' EsophyX fastener delivery system is designed to reconstruct the gastroesophageal valve (GEV) and restore its function as a barrier, preventing stomach acids refluxing back into the esophagus. The company's original EsophyX device and SerosaFuse fasteners were cleared by FDA in 2007. In 2017 the company debuted its latest version of the device, the EsophyX Z+.

    The EsophyX device is used to perform the company’s TIF procedure (Transoral Incisionless Fundoplication), a surgical solution performed without the need for external incisions through the skin that enables physicians to reconstruct the gastroesophageal valve from within the stomach and correct the root cause of GERD.

    "Over the past 12 months, EGS has significantly expanded its commercial team, including the addition of VPs of sales as well as marketing, in addition to building out its salesforce (with plans to continue to add feet on the street going forward)," Mills said in his report.

    Mills also noted that roughly 1,200 U.S. physicians are currently trained to do TIF procedures and EGS plans to leverage its expanding commercial team to drive further adoption, with a primary focus on targeting geographies with a high prevalence of GERD. Furthermore, the company touts an impressive amount of clinical data demonstrating the platform's safety, efficacy, and durability.

    EndoGastric Solutions Inc.
  • Mercator MedSystems

    Mercator MedSystems is another private company that both analysts have highlighted in reports this year. The company is focused on the treatment of peripheral artery disease (PAD) using its catheter-guided, micro-infusion systems for site-specific, non-systemic delivery of therapeutic agents directly across any blood vessel. Mercator's technology also enables therapies for vascular diseases, hypertension, oncology, and regenerative medicine. The company said its Bullfrog and Blowfish Micro-Infusion Devices are the first systems able to infuse drugs, genes, and cells safely through a blood vessel or airway walls into deep tissues without major surgery.

    "We view Mercator’s platform as complementary to atherectomy procedures, with Mercator adding additional value to stand-alone atherectomy," Mills said in his report. He noted that the platform has been used in more than 300 patients (both above the knee and below the knee) with results establishing a high safety profile for Bullfrog (no dissections or aneurysms).

    Mills also pointed out that the recently published meta-analysis linking paclitaxel-eluting stents and paclitaxel-coated balloons to an increased risk of death could play to Mercator's favor.

    "We think Mercator is increasingly well positioned behind its use of sirolimus in its TANGO trial," Mills said. "While the meta-analysis failed to highlight a mechanism of action or direct link between paclitaxel and mortality, we think the stigma around paclitaxel will ultimately act as a boon to Mercator, regardless of whether the results are substantiated on a broader scale."

  • OrthoAccel

    OrthoAccel Technologies is pioneering "accelerated orthodontics" with its AcceleDent Optima device designed to reduce the time that patients need to wear braces or aligners, Matson said. OrthoAccel’s third-generation device, AcceleDent Optima, is designed to accelerate and increase the predictability of teeth movement during orthodontic treatments, he noted.

  • TELA Bio

    TELA Bio develops and markets hybrid soft tissue repair products that are made from both synthetic materials and xenograft (animalderived) tissue that offer the benefits of each type of material without the associated drawbacks and allows the products to be engineered for each specific application.

  • Sonendo

    Sonendo's GentleWave System, which uses ultrasonic technology to make root canal procedures easier on patients, was a finalist in the 2016 Medical Design Excellence Awards. The system delivers treatment fluids and ultrasonic energy to the root canal site to remove tissue, debris, and bacteria. The technology was designed to increase the success rate and shorten the duration of root canals.

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