Obesity Fight Gets $45.2M Lift
Startup EnteroMedics grabs funding for a device to help the overweight drop the pounds.
July 19, 2006
EnteroMedics said Wednesday it raised $45.2 million in a third round of venture funding that will spur development of a device to help the morbidly obese lose weight.
“This will carry us through the completion of our U.S. regulatory trials,” said EnteroMedics’s CEO Mark Knudson. The company also expects the backing to last through the initial commercialization of the device.
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The company is developing an implantable device that uses tiny electrical pulses to regulate multiple functions of the gastrointestinal system. The device attempts to block the conduction of nerve signals between the brain, stomach, and pancreas.
The device is currently in early-stage, international trials. St. Paul, Minnesota-based EnteroMedics expects to start its U.S. trials by the first quarter of next year.
The funding was a big win for the company, weighing in as the third-largest single round of financing among U.S. medical device companies this year, according to PricewaterhouseCoopers’ MoneyTree Report.
The latest funding round was led by InterWest Partners. Additional backers included Onset Ventures, Pacific Asset Partners, Mayo Foundation for Medical Education and Research, MPM Capital, Bay City Capital, Aberdare Ventures, and Charter Life Sciences.
In total EnteroMedics has raised $61.1 million in venture funding.
New Field
EnteroMedics is part of a growing breed of companies carving out a niche in the neurotechnology field where devices are used to administer or block electrical pulses to the nervous system to treat a variety of diseases and disorders.
The EnteroMedics device works by blocking signals from the vagus nerves. The nerves, which start at the brain and head south to the stomach and other organs, are believed to play a role in food processing. Researches have tied the nerves to signaling the feeling of fullness as well as managing hunger through a variety of functions.
To help bring more control over the gastrointestinal system, EnteroMedics has built a multifaceted device. It includes electrodes that are implanted at the top of the stomach, with leads that are attached to a pacemaker-like implant that is placed under the skin of a patient’s side.
It is the pacemaker that delivers the therapy to the electrodes to help control for the expansion of the stomach to take in food, the grinding up of the food, and the pancreatic secretions that break down the food.
Not Alone
EnteroMedics isn’t the only medical device company using such implantable technology to target obesity. Other players like Medtronic and Cyberonics are also pushing ahead trying to be the first to market with similar technology for the treatment of obesity.
Currently, the technology has found itself already in use in approved devices for the treatment of such conditions as epilepsy and drug-resistant depression.
But if EnteroMedics can bring its device to market it could tap the burgeoning neurotech field that is currently worth about $3 billion and is expected to hit $8 billion by the end of the decade, according to San Francisco-based publishing house Neurotech Reports.
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