EndoGastric Solutions (EGS) announced Tuesday that is has raised $30.5 million in new capital to help commercialize its minimally invasive transoral incisionless fundoplication (TIF) procedure, and associated EsophyX device, to treat gastroesophageal reflux disease (GERD). The money will also support clinical studies.
Existing investors Advanced Technology Ventures (ATV), Canaan Partners, Canepa Healthcare, Chicago Growth Partners, CRG, Radius Ventures, Sightline Partners, and several new healthcare investors participated in this round of funding.
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The Redmond, Washington-based company believes the money will help it finally dive into the potentially huge GERD market.
“About 25 percent of the population in the U.S. has GERD,” said President and CEO Skip Baldino in a phone interview. “Probably about 20 million people are on PPIs (acid reducing protein pump inhibitors), and 30 to 40 percent aren’t getting symptom control from PPIs.”
GERD patients have problems with their lower esophageal sphincter – the valve between the stomach and esophagus – allowing stomach acid to leak into the esophagus, causing intense heartburn and other issues. GERD can lead to esophagitis and, in some cases, esophageal cancer.
The new funding is a sign EGS may have turned the corner in its efforts to commercialize TIF. The EsophyX received FDA approval in 2008, but a dearth of clinical data and payer buy-in, along with reproducibility issues, made it a difficult sell.
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GERD patients have relied on dietary changes, PPIs, such as Nexium, or invasive Lap Nissen procedures to manage their condition. Unfortunately, surgery can generate chronic side effects, such as difficulty swallowing, and PPIs have their own issues.
“The last three or four years, there have been a lot of reputable studies that show the long-term use of PPIs does have some severe potential risks, like kidney failure, liver disease and dementia,” said Baldino.
EGS believes their TIF procedure can alleviate GERD without the side effects associated with surgery or medication. The endoscopic approach repairs the valve from the inside, eliminating the external cutting, and can be repeated if necessary.
Baldino notes their redesigned EsophyX makes the procedures easier to perform and more reproducible than previous iterations. Also, five-year data released in February from the TEMPO trial showed the procedure is both safe and effective. This clinical validation led to improved reimbursement.
“We’ve got great long-term data,” said Baldino. “We’ve got a device that works and is easy to use, and we’ve got a pathway to payment for our facilities and physicians.”
EGS hopes the new funding will help them leverage the improved climate to popularize the procedure. Their main competition is Johnson & Johnson, whose Ethicon unit last year acquired Torax Medical and their Linx system. Baldino is confident the market is more than large enough for both companies and believes that, with the redesigned EsophyX, EGS has an edge in ease-of-use.
“We’re agnostic to the specialty groups,” said Baldino. “We sell to whoever serves the GERD patient, which is typically the foregut surgeon, the bariatric surgeon and the interventional GI community. We’re the only commercially approved company that sells to both GIs and surgeons.”
Photo: freedigitalphotos user Salvatore Vuono
