GERD neurostim startup nabs $25M to back ex-U.S. sales, conduct U.S. pivotal trial

EndoStim's LES Stimulation therapy--Courtesy of EndoStim

Medical device companies are aiming to offer real solutions to treat gastroesophageal reflux disease (GERD), a common indication that's poorly served by existing drug therapies. One of these is EndoStim. The Dutch startup has gotten a $25 million Series D infusion to market its neurostimulation device to treat GERD outside the U.S. and to start a pivotal trial within it to gain FDA approval.

The company first gained a CE mark for its minimally invasive implant in 2012. And last fall, it got another for a full body MRI-friendly version of its EndoStim LES Stimulation Therapy. The EndoStim system is already marketed in several countries throughout Europe, Latin America and Asia Pacific. The 110-patient, sham-controlled U.S. pivotal trial is slated to start next month with final primary outcome data due in June 2017, according to Clinicaltrials.gov.

"EndoStim ... has created a truly revolutionary, minimally-invasive therapy that provides long-term control of esophageal acid exposure, while avoiding the risk of side effects that is common with traditional anti-reflux surgery," said Alexander Schmitz of European med tech venture firm Endeavour Vision in a statement. He recently joined the company's board. "We are confident that EndoStim will ultimately become a standard of care in GERD treatment in the U.S. and worldwide."

The device is meant to function sort of as a pacemaker for the intestinal system. It's intended to restore long-term reflux control and normal esophageal function by routinely applying low-energy, individualized neurostimulation impulses to the esophageal sphincter muscle between the stomach and the esophagus. A weak or dysfunctional lower esophageal sphincter is often the underlying cause of GERD.

Other med tech startups have taken on GERD as well. Last December, EndoGastric Solutions raised up to $50 million to back its FDA-cleared transoral incisionless fundoplication device. Another startup, Torax Medical, has an FDA-approved minimally invasive magnetic ring implant that sits at the base of the esophagus. In the last 6 months, both won reimbursement codes from the American Medical Association (AMA).

EndoStim has conducted two long-term clinical trials and has an ongoing international patient registry for its device. The data show that it's effective in controlling abnormal acid in the esophagus and improving patient quality of life through four years, according to the company.

Specifically, in clinical trial data on 15 patients at three years, all but four had ceased regular PPI use with three of them returning to normal esophageal pH. About three-quarters had reduced their esophageal acid exposure by 39% to 48% from baseline without any device-related adverse events or untoward sensations reported.

Endeavor Vision, which recently closed a $275 million dedicated med tech and digital health fund, led the round with participation from existing investors including Santé Ventures. New investors Wellington Partners and Gimv also joined the syndicate. In 2014, EndoStim had been slated for a $35 million IPO that never made it to market.

"Hundreds of millions of patients worldwide suffer from GERD, and many are not optimally treated with long-term proton pump inhibitor medication," said Doug French, managing director of Santé Ventures and chairman of EndoStim's Board of Directors. "We believe EndoStim is perfectly positioned to address the therapy gap that exists for patients with severe reflux."

- here is the announcement
- and here is the Clinicaltrials.gov record for the U.S. pivotal trial

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