St. Jude Medical announced Monday that it has exercised the option buy Spinal Modulation, a company in which it had previously invested $40 million.

The Minnesota device maker is paying $175 million up front with a possibility of additional payments to acquire the company based in Menlo Park, California. Spinal Modulation has developed the Axium Neurostimulator System, which is an implanted, intraspinal neuromodulation device to treat chronic intractable pain.  Other corporate investors in the startup included Medtronic and Johnson & Johnson, while venture investment came from firms including De Novo Ventures, InCube Ventures, MedVenture Associates and Kleiner Perkins Caufield & Byers.

In a news release Monday, St. Jude Medical stated that once the acquisition closes in the second quarter, the company will "become the only medical device manufacturer to offer radiofrequency ablation (RFA), spinal cord stimulation (SCS) and dorsal root ganglion (DRG) stimulation therapy solutions' to treat chronic pain.

Company executives believe that because it stimulates the dorsal root ganglion, Axium has adopted a novel manner to treat chronic pain. DRG are small clusters that contain nerve fibers that carry signals to the brain. Providing mild electric pulses to these nerve clusters would interrupt the signals of pain that the brain receives.

This mechanism of treating pain by stimulating the DRGs allows treating pain in areas that are currently not addressed by traditional spinal cord stimulation, according to St. Jude Medical. These include hard to reach anatomy - extremities like the foot and back. Axium apparently also requires 95 percent less power than traditional spinal cord stimulation therapies, the company said in the previous news release announcing the $40 million investment back in 2013.

The product obtained CE Mark in 2011, and in December Spinal Modulation announced that enrollment in its pivotal trial was complete. The PMA application is now with FDA. 

Arundhati Parmar is senior editor at MD+DI. Reach her at [email protected] and on Twitter @aparmarbb