Canadian micro-cap Spectral nabs $7.1M to finalize PMA for septic shock device-Dx combo

Paul Walker, Spectral Medical CEO

Toronto-based Spectral Medical ($EDT) has raised CA$10 million ($7.1 million) in an offering to back its effort to earn FDA approval for its septic shock treatment device-diagnostic combination. The company said earlier this month that it expects to submit its final PMA module to the FDA in the second half of 2016; it added that it submitted the first three modules to the agency last year.

The company said it's developing the first therapeutic device guided by a diagnostic to treat endotoxemic septic shock. Earlier this month, Spectral said it had 400 patients enrolled in an ongoing pivotal trial, with a total of 446 evaluable patients needed to complete the trial. The trial is slated to complete during the first half of 2016.

"We are now in the final stages of program execution to reach our goal of solving a very large unmet medical need in the area of septic shock, a condition which kills over 300,000 people in North America each year," Spectral President and CEO Dr. Paul Walker said in a statement. The ongoing randomized pivotal trial has had a roughly 50% mortality rate so far, which the company said is in line with FDA expectations.

Endotoxin Activity Assay (top) and Toraymyxin (bottom)--Courtesy of Spectral Medical

"We are becoming more confident each day about achieving a positive outcome for our clinical trial and a subsequent successful product launch into a $3 billion market where there are currently no other approved therapies for endotoxemic septic shock," concluded Walker.

The device-diagnostic combo is comprised of a hemoperfusion device Toraymyxin to remove endotoxin, a primary trigger of sepsis, from the bloodstream and the company's Endotoxin Activity Assay (EAA), which it claims is the only FDA-cleared diagnostic for the risk of developing sepsis.

Toraymyxin, also known as PMX, is already approved in Europe and Japan and has been used on 150,000 patients to date. Spectral obtained the exclusive U.S. development and commercialization rights for it in March 2009.

In the financing, underwriters led by Cormark Securities committed to buying 14.3 million shares of the company priced at C$0.70 per share. They will subsequently resell them to the public via a public prospectus.

- here is the announcement