GE backs depression neurostim startup Neuronetics in $34M Series F round

NeuroStar TMS system--Courtesy of Neuronetics

Neuronetics has closed a $34.3 million Series F round to further commercialize its NeuroStar transcranial magnetic stimulation (TMS) therapy system to treat drug-resistant major depressive disorder (MDD), as well as to fund a registration study for adolescent use of the device. NeuroStar was cleared by FDA in 2008 to treat MDD, but the company said it's just recently been gaining traction with payers.

The company said that recently it has increased its insurance coverage of NeuroStar to 200 million insured lives from 100 million, due to a study published last year in the Journal of Clinical Psychiatry. The one-year data showed that the device shows long-term effectiveness and durability in the treatment of MDD in adults.

"We are firmly committed to expanding treatment with TMS to all 4 million treatment resistant adults living with depression, who cannot benefit from their current antidepressant treatment plan. This additional funding will also allow us to work towards fulfilling a significant unmet medical need among the 2 million adolescents suffering with the condition," said Neuronetics President and CEO Christopher Thatcher in a statement.

The NeuroStar system is intended for use at clinics, physician offices and hospitals. Via the system, patients are given focused MRI-strength magnetic field pulses to activate cortical and deep brain structures that regulate mood. The treatment typically is given daily for four to 6 weeks.

The recent one-year data examines outcomes for 257 patients that completed the rigorous daily regimen, although the study started out with 307 patients with a primary diagnosis of unipolar, nonpsychotic major depressive disorder and who had failed to receive benefit from prior antidepressant medication.

At three months, 62% of patients achieved symptomatic improvement and 41% reported complete remission. The results improved over time, even without continued treatment. At 12 months, 68% of patients had improved symptoms, while 45% had complete remission.

Prominent strategic investor GE Ventures led the financing, with participation from existing investors. Venture firms New Leaf Venture Partners, Quaker Partners, Polaris Ventures, Onset Venture and Three Arch Partners all have a seat on the Neuronetics board already. Pfizer ($PFE) and Interwest Partners are also existing investors.

Neuronetics was founded in 2003 out of Atlanta, GA-based med tech incubator The Innovation Factory and, including this latest round, has raised at least $73.6 million in venture financing.

"The company is well positioned for expansion," said Leslie Bottorff, managing director at GE Ventures in Healthcare, said in a statement. "We anticipate a bright future for Neuronetics as they work to use their transcranial magnetic stimulation technology to help improve the lives of millions."

- here is the release