Health IT, Devices & Diagnostics

Sotera Wireless files for Chapter 11 bankruptcy protection

Sotera’s ViSi Mobile system was designed to wirelessly transmit vitals data to clinicians with the goal of improving patient safety.

Visi Mobile patient monitor

ViSi Mobile patient monitor

This story will be updated as new information becomes available.

Sotera Wireless, a med tech company that developed a wireless patient monitor, has filed for Chapter 11 bankruptcy protection. MassDevice first reported this news. MedCity News subsequently obtained a copy of the bankruptcy filing.

sponsored content

A Deep-dive Into Specialty Pharma

A specialty drug is a class of prescription medications used to treat complex, chronic or rare medical conditions. Although this classification was originally intended to define the treatment of rare, also termed “orphan” diseases, affecting fewer than 200,000 people in the US, more recently, specialty drugs have emerged as the cornerstone of treatment for chronic and complex diseases such as cancer, autoimmune conditions, diabetes, hepatitis C, and HIV/AIDS.

Sotera’s ViSi Mobile system is designed to wirelessly transmit data to clinicians with the goal of improving patient safety by providing a way to detect a decline in the patient’s condition earlier and to help prevent adverse events.

The company owed close to $13.1 million to Silicon Valley Bank and Oxford Finance, according to MassDevice.

Despite commercializing its device in 2014, Sotera Wireless was hindered by “technical and performance issues” with its device that “required Sotera to redirect resources and resulted in delays of new product features and enhancements and ultimately in the reduction of revenue,” MassDevice reported.

Sotera also got embroiled in litigation with Masimo, according to the MassDevice story. A civil lawsuit by Masimo alleged that Sotera, one current employee and one former employee misappropriated trade secrets.

The company’s balance sheet shows that Sotera had a net loss of $25.2 million in 2015 compared with revenue of $526,000, according to a document MedCity News obtained on the valuation of the company.

It closed a Series E round last year totaling $59.7 million from an investor group led by Sutter Health and Sanderling Ventures, according to the document.

Sotera had several agreements with various healthcare facilities to use its device. Earlier this year, it inked a deal to be a supplier for HealthTrust, which works with more than 1,400 acute care facilities and members in locations that span ambulatory surgery centers, physician practices, long-term care and alternate care sites. It also had a reseller agreement with Cerner.

Sotera has been looking for a buyer and to that end it obtained a valuation from SVB Analysis which concluded that Sotera’s equity value was $98.9 million and that the enterprise value was $88.8 million.

Sotera did not immediately respond to requests for comment.

Most of the investors listed on Sotera Wireless’ website are strategic investors such as Qualcomm Ventures — marking one of the first digital health investments by the strategic investor, West Health, Intermountain Healthcare, Sutter Health Plus, Foxconn, and Intel Capital. Another investor is Sanderling Ventures.