Greatbatch spinout Nuvectra nabs $45M in debt to launch its neurostim chronic pain implant

Algovita Spinal Cord Stimulation System--Courtesy of Greatbatch

Nuvectra completed its spinoff from Greatbatch in mid-March. Now, in its first disclosed financing, the micro-cap public company has raised $45 million in debt from financiers who are more typically venture debt providers, Oxford Finance and Silicon Valley Bank.

The neurostim company has secured the $40 million term loan and $5 million line of credit combo in order to back the U.S. launch of its Algovita, which FDA approved late last year to treat chronic intractable pain of the trunk and/or limbs. The device is also CE-marked in the same indication. It's been marketed in Europe since late 2014.

"We believe there is a large market opportunity for this device, as its advanced power capabilities and flexible leads will improve treatment outcomes compared to competing products," said Christopher Herr, senior managing director at Oxford Finance, in a statement on Algovita.

Algovita Spinal Cord Stimulation (SCS) System includes an implantable stimulator that can be attached to one, two or three leads upon implantation. It also requires a charging system and hand-held programmer. The FDA-approved indication includes unilateral or bilateral pain associated with failed back surgery syndrome, intractable low back pain and leg pain.

The spinoff is taking on major medical device players such as St. Jude Medical ($STJ), Boston Scientific ($BSX), Medtronic ($MDT) and Wall Street darling Nevro ($NVRO), which has secured an almost $2 billion valuation since its November 2014 IPO, that already have established spinal cord stimulation implants to treat chronic pain in the limbs and lower back.

Nuvectra ($NVTR) came out of Greatbatch ($GB) with other neurostim R&D programs including sacral nerve stimulation and deep brain stimulation. The spinoff also has the NeuroNexus subsidiary that specializes in the design, manufacture and marketing of neural-interface technologies for use in neuroscience research.

Algovita Spinal Cord Stimulation System--Courtesy of Greatbatch

In February, ahead of the official spinout, Nuvectra partnered with Aleva Neurotherapeutics and invested in it to back its deep brain stimulation implants. The Lausanne, Switzerland-based startup has a development and supply agreement with Nuvectra.

"The Nuvectra board is excited to support the creation of a new public company in the neurostimulation space, which represents a large and growing market opportunity," said Nuvectra chairman Joseph Miller in a statement when Nuvectra started trading publicly. "Being a stand-alone company will allow Nuvectra to better focus on the needs of its clinician and patient customers."

Nuvectra is based in Plano, TX and has a market cap of about $90 million.

- here is the financing announcement