SetPoint Medical’s march toward getting its bioelectronic platform across the finish line obtained a huge boost this week through a financing.
The Valencia, CA-based company announced it had raised $64 million in a preferred stock financing to help in the development of its bioelectronic platform to treat rheumatoid arthritis (RA).
This financing was led by New Enterprise Associates (NEA) and included returning investors Action Potential Venture Capital, Boston Scientific, Topspin Fund, Morgenthaler, Euclidean Capital, and an undisclosed strategic investor.
New investors including ShangBay Capital, Richard King Mellon Foundation, Ascendum Capital, Asahi Kasei, Catalio Capital Management, BPC Fund, Midas Capital, Revelation Partners, Aethan Capital, Citta Capital, and SVE Capital also participated in this round. William Dai, Founding Managing Partner at ShangBay Capital, has joined SetPoint Medical’s Board of Directors in conjunction with this financing. The financing included the conversion of approximately $21M in outstanding convertible debt.
“This financing sets us up to start the pivotal trial, which will begin [soon],” Murthy Simhambhatla, PhD, president and CEO of Setpoint, told MD+DI. “The data from this pivotal trial, which will be from 250 patients at 40 sites, will be used to support a PMA submission.”
Simhambhatla added, “the pivotal trial is important in generating high-quality data. It is a double-blind sham-controlled trial. It’s in patients that have failed one or more biologic drugs or are intolerant of them. It’s a second-line therapy. It’s not for patients that have failed methotrexate, but patients that have been exposed to at least one biologic drug and have had an inadequate response.”
The company is forecasting three years before it can file a PMA submission.
SetPoint’s device, which is about the size of a coffee bean, won breakthrough device designation in October of 2020. The foundation of the technology is based on impacting the Inflammatory Reflex, a mechanism discovered by SetPoint co-founder Kevin Tracy, said David Chernoff, MD, SetPoint’s CMO.
The Inflammatory Reflex regulates the immune system by way of the central nervous system. By activating the Inflammatory Reflex with targeted electrical pulses to the vagus nerve, the body produces a systemic anti-inflammatory response.
SetPoint isn’t stopping with RA and will explore using the platform to treat other disease states.
“The same feedback loop that can potentially help patients with rheumatoid arthritis can potentially help patients with Inflammatory Bowel Disease,” he said. “We’ve run a clinical trial in Crohn’s Disease where we saw reductions in disease activity that are comparable to best-in-class approved drugs.”
Simhambhatla added, “the immediate priority is to get Rheumatoid Arthritis across the finish line. Once we do that, we’ll turn our attention to Crohn’s Disease, potentially ulcerative colitis, potentially Multiple sclerosis.