CardiOx Corp., which is developing a noninvasive method for detecting holes in the heart, has raised about $650,000 in investment funding.
The company may not be done with its latest round of funding, hoping for as much as $2 million by the time it’s complete. The fundraise comes in the form of debt, warrants and options and was sourced from three investors, according to a regulatory document the company filed with the U.S. Securities and Exchange Commission.
CardiOx is developing a non-invasive way to detect right-to-left heart shunts (a defect known as a patent foramen ovale or PFO), which in some people can lead to strokes, heart attacks and migraine headaches. CardiOx’s approach combines an injection of dye with a diode sensor on the ear to determine the presence of a shunt. The device also can be used to verify that surgery succeeded in patching the hole.
The procedure is less invasive than the current method of diagnosing shunts, in which a probe is pushed down the throat to the heart, and it can also be used to test whether repair attempts are successful.
CEO Larry Heaton, a medical device industry veteran who started with the company in April, said the investment would be used to fund operations through the submission of applications for approval from U.S. and European regulators, as well as the completion of clinical studies. The company plans to make its regulatory filings by the end of the year, he said.
CardiOx is targeting the second quarter of 2011 for European regulatory approval, known as the CE Mark, and third quarter for 510(k) approval from the U.S. Food and Drug Administration.
The company is looking to raise another round of investment, likely a few million dollars, to fund commercialization of its device, Heaton said.
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.
So far, the company has raised about $4 million in venture money, primarily from Cleveland-based Early Stage Partners and Columbus-based Reservoir Partners, Heaton said. In June, CardiOx and two other firms were awarded a nearly $1 million grant from Ohio’s Third Frontier program to finalize designs and clinical protocols for the company’s technology.
“We’ve got the whole clinical side figured out,” said Mike Bunker, a managing director with Early Stage Partners. A decade ago at device giant Medtronic Inc., Bunker led a $750 million global product launch in cardiac rhythm management and served on product development, strategy and clinical committees.
The diagnostic market for the three indications the company is pursuing — stroke, heart attacks and migraines — likely is more than $1 billion, Bunker said.
The topic of PFO made an appearance in the news recently when the defect was linked to a stroke suffered by former Poison lead vocalist and reality TV star Bret Michaels. Between 20 and 25 percent of people suffer from PFOs, but most won’t experience any problems as a result, the Seattle Times reported.
