Cleveland Clinic’s most promising startups
That’s the return Cleveland Clinic received after the $78 million sale of Clinic spinoff Intelect Medical to Boston Scientific (NYSE:BSX). It was the largest of three exits so far for companies affiliated with Cleveland Clinic Innovations, the health system’s technology transfer and commercialization group. But by all accounts, Cleveland Clinic has a stake in a series of promising companies and, in one case, one of the most encouraging startups in the United States.
Here’s a list of Cleveland Clinic-affiliated startups that could be generating headlines soon.
Castlight Health: Any list of Clinic-affiliated startups must start with Castlight — simply because of the acclaim the company received from the Wall Street Journal, which earlier this month named Castlight the top venture-backed company in the U.S. Castlight isn’t a Clinic spinoff (meaning it’s not based on technology developed by Clinic doctors or researchers), but the Clinic is an investor.
California-based Castlight’s aim is to push transparency in healthcare pricing by offering consumers a search engine to find those prices. Armed with prices, consumers would then shop for bargains, limiting the growth of healthcare costs, the thinking goes. Safeway, the grocery store chain that employs 200,000 people, was Castlight’s first customer. The company has raised $81 million from a host of investors, including Morgan Stanley, Oak Investment Partners, Venrock and U.S. Venture Partners.
Arterial Remodeling Technologies: This French company makes biodegradable, or as they’re sometimes called, “bioresorbable” stents, which are tiny tubes designed to open narrow or blocked arteries and then dissolve. A former chairman of the Clinic’s department of biomedical engineering worked with researchers at two French institutions to develop the company’s device. The company has raised a total of $17 million.
Bioresorbable stents could become “the next revolution,” Abbott Laboratories’ top device executive told Bloomberg News last year. Abbott and Boston Scientific are among the heavy hitters working to develop their own versions of the device. Arterial Remodeling Technologies could become an attractive acquisition target for a big device firm if tests of its stents continue to show (pdf) positive results.
Cleveland HeartLab: Demand for this startup’s proprietary test for cardiac inflammation has led to an “explosion” in the company’s business, CEO Jake Orville said last year. In 2010, the company doubled its number of employees and completed a $3 million fundraise from investors including Glengary and Second Generation Ltd.
The test, called CardioMPO, was developed by Dr. Stanley Hazen, director of the Clinic’s center for cardiovascular diagnostics and prevention, and his colleagues. Cleveland HeartLab scored a huge win last year when the Centers for Medicare and Medicaid Services increased by a jaw-dropping 250 percent the reimbursement rate for the company’s hallmark inflammation test.
Explorys: Cleveland-based health IT firm Explorys is looking to take advantage of what’s expected to be an explosion in the use of electronic medical records by doctors in the coming years. Explorys acts as a repository and cleanser of data coming from many different clinics, hospitals, doctors offices and researchers, putting all the data into a central research database.
The idea is that healthcare organizations can mine that electronic medical records data to look for trends that could lead to improvements in patient safety and clinical effectiveness. The company has raised about $3.6 million over the last year and a half. Its series B round was led by Austin, Texas-based Sante Ventures.
Tolera Therapeutics: This Kalamazoo, Michigan-based company is working on a drug that fights organ rejection in transplant patients. The Clinic spinoff was co-founded by Dr. Maria Siemionow, the health system’s director of plastic surgery research. Siemionow earned lots of renown in 2008, after leading a team of Clinic surgeons who performed the nation’s first near total face transplant.
The company, which was spun off from the Clinic in 2007, had raised $14 million at last check. Tolera’s drug is designed to suppress the immune systems of patients who have received organ transplants, which can fail because the body rejects and attacks the transplanted organ. It’s in the midst of a phase 2 clinical trial.
Axiomed Spine: Established in 2001, Garfield Heights, Ohio-based Axiomed may be stretching the definition of the word “startup,” but the developer of replacement cervical and lumbar spinal discs doesn’t yet have any products on the U.S. market. Though the company isn’t based on Clinic-developed technology, two of the hospital’s doctors — Edward Benzel and Isador Lieberman — were “instrumental” in helping the company refine its next-generation technology, according to the Clinic.
Axiomed received the CE Mark, which signifies European regulatory approval, for its lumbar disc replacement in 2009. The lumbar replacement could be on the U.S. market in around three years, with the cervical disc to follow. The company has raised $56 million in financing over its lifetime, with investors including CID Equity Partners, Early Stage Partners, Investor Growth Capital Limited and Primus Capital.