UM Growth Capital News: HistoSonics Makes Key Advances in Clinical Studies and Venture Financing

Shannon Beeman
April 11, 2014

Over the past year, HistoSonics Inc. has laid important groundwork for clinical studies and venture financing to advance the commercialization of its Vortx Rx histotripsy system. The Ann Arbor-based company is now well-positioned for rapid market entry and expansion.

Launched in 2009, HistoSonics is nearing completion of a U.S. pilot clinical trial to demonstrate the safety and effectiveness of the Vortx Rx system in treating benign prostatic hyperplasia, or BPH, a common condition in men caused by enlargement of the prostate. The clinical study, which began in July 2013, will enroll 25 patients at sites in Ann Arbor and Toledo. The Vortx Rx is based on histotripsy technology developed by University of Michigan scientists led by Charles A. Cain in the Department of Biomedical Engineering. The histotripsy technology and intellectual property were licensed by HistoSonics in early 2010.

“Moving from the development of this revolutionary technology into the first pilot clinical trial is a huge step and represents a major milestone,” says biomedical physiologist Thomas Davison, the chairman and CEO of HistoSonics. “We’re pleased with the results. There have been no adverse events related to histotripsy, and the patients are doing well. It’s still early, so there is not sufficient data to draw conclusions.” Patients will be evaluated over a six-month period to check for any unwanted side effects, such as bleeding, and to determine the extent to which the Vortx Rx relieves BPH symptoms, including frequent urination and urine retention. BPH affects two million men in the U.S. and four million worldwide, representing a global market potential for BPH treatment of more than $500 million annually.

“We expect the advantages of our device to be fewer adverse events, less pain and fewer complications,” Davison explains. “Patients will have a shorter recovery time and be able to resume their normal activity within a week or so.”  The Vortx Rx system integrates ultrasound therapy, real-time imaging and surgical planning to enable a surgeon to deliver histotripsy, a non-invasive, non-thermal therapy for treating BPH. Improved outcomes are expected because Vortx Rx image guidance and robotic control allow urologists to remove diseased tissue with greater precision. The system has the potential to replace open surgical and minimally invasive surgical procedures, and to reduce patient trauma, recovery time and health-care costs. Histotripsy technology has other potential applications, including thrombolysis, cancer treatments, breast fibroadenomas and uterine fibroids.

If all goes as planned, HistoSonics will return to the venture-capital market for additional funding in late spring, wrap up the pilot clinical trial in early fall and then begin preparations for a pivotal trial involving 200 patients in 2015. “This spring we expect we’ll have enough pilot clinical safety data and outcome data that will enable us to tell our story to a Series B investment group,” Davison says. “We’ll be raising an additional $12 to $15 million, which will get us through the pivotal clinical trial and early market launch outside the United States.” He says the company will submit a premarket approval in the U.S., but launch outside the U.S. ─ possibly in Europe, Australia, Canada and Japan ─ while waiting for the PMA. Follow-on financing plans call for raising a Series C round to finance commercialization, which is expected by late 2016 outside the U.S. and late 2017 in the U.S.

Presenting at the Michigan Growth Capital Symposium initially helped HistoSonics build a strong syndicate of venture-capital investors for its $12 million Series A round in 2009, which financed the company for four years. Lead investors include Jim Adox of Venture Investors in Ann Arbor, Rernard Charity of Fletcher Spaght Ventures in Boston and Bob Morff of Hatteras Venture Partners in Durham, North Carolina. TGap Ventures in Kalamazoo, Michigan, and Early Stage Partners in Cleveland also have come on board, according to Davison, who made his first fundraising pitch at the 2009 MGCS.

“The MGCS is second to none,” he says. “It’s a tremendous venue that is very well attended by Midwest VCs. Early on, the symposium gave us a platform to create awareness of our company and connect with investors. Our presence at the 2015 MGCS this year will help us with our Series B financing.”

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