Torax Med.gets $18M in venture cap - Memphis Business Journal:

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The Shoreview-based company will use the capital to fund ongoing clinical trials and seek regulator approval ofits device, dubbed Lynx. New investord in the company include AccuitiveMedicak Ventures, of Duluth, Ga., whicyh led the round, and Oakland, Calif.-based Kaisetr Permanente Ventures. Those firms put a combined $7.5 million into the receng round. Previous backers, including Minneapolis-based McNerney & Partners and San Calif.-based Sanderling Ventures, also Torax may raise an additional $3 million by the end of the bringing the total round toabout $21 million, said CEO Todd Berg. Berg, a formet vice president of emerging technologyfor St. Jude Medical Inc.
, co-founded Torax in 2002. He was drawn to the acid-reflux market in part because it was less saturatexd with competitors thanother areas, such as “Everywhere you turned, people were doing the same I felt like there were big marketxs outside cardiology that had not receive d more sophisticated device attention.” Torax’s Lynx is akin to a ring made of magnetic beads. The ring is placed around the lower esophageal a muscle that sits where the esophagu andstomach intersect.
The energy createsd by the magnets supports and strengthensthe muscle, preventinv acid from seeping into the The device also is flexible enoughn to comfortably allow food to pass throughg to the stomach, Berg Torax is now conducting clinical trials to test the devicde on patients suffering from acid-reflux disease, which affecta an estimated 20 million people in the Unitedf States. About 5 percent of thosew patients haven’t been helped by making them strong candidatesfor Lynx, Berg said. He expectsx to apply for U.S. Food and Drug Administratiob approvalin 2011. While the acid-reflux market is it’s been a tough one for medical-devic e companies to swallow.
Bosto Scientific, for instance, took a producty for treating acid-reflux off the market in citingsafety concerns. The Natick, Mass.-based company’s technologh used a polymer to reinforce the area betweebn the esophagus and the stomach to keep acid from Medtronic also gave up on itsown acid-reflux-fightin technology, dubbed the Gatekeeper System. The system insertedd a dry material that expandedf when wet nearthe sphincter, establishing a partialp barrier between the stomach and Although the device had been approved for sale in Europew in 2003, the Fridley-based compant later abandoned efforts to seek regulatoryt approval in the United States, citing concerns that it did not work as well as Despite those failures, Berg is confidentf Torax will succeed, partly becaus e its device helps the sphincter muscle work while other technologies have simply focused on bulkinbg up the area between the stomach and throat.
“Witn our device, you create a barrier that’sw dynamic in nature,” Berg said. “Without restoring that barrier you’re not going to be John Deedrick, managing director at AccuitiveMedical Ventures, agreed that Torax’s technology is unique, which is partlh why his firm invested in the company. “The previous technologies did not address thekey problem. While there certainly are goinfg to berealistic hurdles, we find this approach is so differentg and the data is so compelling, we’lo be able to get over it,” said who also led Mayo Clinic’s venture-capital arm when it investefd in Torax several years ago.
Torax also facew competition from thepharmaceutical industry, as patients who suffer from acid-reflucx disease are most ofteh treated with drugs. Sales of drugs that treat acid refluctotalled $14.1 billion in 2008, up from $13.7 billion in according to market research conducted by Norwalk, Conn.-base d IMS Health Inc. “Drugs are a startintg point, but they don’t fix the defect,” Berg “Many of these patients need something morethan