Devices & Diagnostics, Startups, Health Tech

Cala Health raises $50M ahead of commercial launch of its bioelectric stimulation device

The Burlingame, California-based startup bills itself as a bioelectric medicine company that is using electric signals to stimulate the nervous system as a pathway to treat chronic disease.

The majority of pharmaceuticals function by altering or adjusting the biological and chemical systems of the body. Cala Health is part of a new breed of companies developing therapeutics that target the body’s electric circuitry instead.

The Burlingame, California-based startup bills itself as a bioelectric medicine company that is using electric signals to stimulate the nervous system as a pathway to treat chronic disease.

Cala has raised a $50 million fundraising round from investors as it prepares for the launch of its Cala Trio device, a wearable device meant to address hand tremors in essential tremor patients. New investors in the Series C round included Novartis, Baird Capital and TriVentures.

Essential tremor is a movement disorder that affects around 7 million people in the United States. Pharmaceutical treatments for the condition are limited, but one procedure that has been shown to improve symptoms has been deep brain stimulation of the thalamus through an electric device.

By electrically targeting the body’s peripheral nervous system at the wrist using its wearable, Cala’s technology is able to stimulate the deep brain and therapeutically reduce tremors without the risks and costs associated with brain surgery.

“There’s been an explosion of knowledge in neuroscience that has allowed us to go from stimulating at the organ to stimulating the circuit to affect the organ,” Cala Health CEO Kate Rosenbluth said. “Our technology is focused on stimulating the right circuit, with the right signal, at the right time.”

Cala’s device has the ability to tune its electrostimulation to patient’s specific tremor and clinical evidence has shown that the technology’s therapeutic effects endure after direct stimulation ends.

The FDA gave de novo clearance for the company’s first generation Cala ONE product in April and in October gave 510(k) clearance for technology in its Cala Trio device.

The company recently completed enrollment in its PROSPECT study, a 500-person single-arm multicenter trial intended to test the company’s wrist worn technology over a three month period.

Cala’s Trio device will be made available in limited release later this year with a physician’s prescription. The company is also developing the infrastructure necessary for telemedicine examination and prescription for its products.

“I feel that bioelectric medicine breaks down the traditional silos between pharma and tech,” Rosenbluth said. “We’re both a device company and we’re delivering the medicine – the electricity – to patients.”

Cala is taking a page from Amazon by acting as its own vertically-integrated direct distributor and shipping products directly to patients to create a more streamlined consumer experience.

To help in its category creation, Cala has enlisted has enlisted strategic investors and advisors from across the consumer technology, medical device and pharmaceutical industries.

The company has raised more than $70 million in total from investors like Johnson & Johnson, Lightstone Ventures, Google Ventures and dRx Capital, a joint venture investing vehicle from Novartis and Qualcomm.

As part of the most recent financing round Lightstone Ventures’ Stacy Enxing Seng will be joining the company’s board as its chair. 

“The genius of Cala is using electricity as medicine but doing so without the need for an implant,” Seng said. “This allows a new paradigm within bioelectric medicine that allows effective treatment but in a form that is far more conducive to what patients want: personalized treatment, accessibility, ease of use, and manageable cost.”

Still, there are unanswered questions about how Cala’s technologies will be integrated into existing healthcare business models. Rosenbluth was vague about the company’s reimbursement strategy and would not share the sales price of the device at launch.

“The most important thing is for patients to be able to get access and we believe that reimbursement is key is product accessibility,” Rosenbluth said. “We’re very much a medical company and we believe that our product should be offered under the care of a physician and should be paid for through reimbursement.”

Neil Tiwari, a general partner at dRx Capital, said he foresees Cala’s development into a platform technology company that has different form factors to target different peripheral nerves.

“It’s exciting to see Cala’s ability to provide a new therapeutic modality using wearable technology,” Tiwari said. “As we see digital therapeutics continue to develop, I view electrical medicine as being a key part of the category.”

Earlier this year, Cala announced a licensing agreement with Partners Healthcare affiliate Massachusetts General Hospital for a new type of neuromodulation technology.

Rosenbluth said the partnership was “only the first” of similar deals for the company as it looks to expand its products across the initial focus areas of cardiology, neurology and psychiatry.

Picture: mrspopman, Getty Images