Infraredx snags $25M as it sets sights on Japan

Infraredx plans to launch its TVC Imaging System in Japan next year.--Courtesy of Infraredx

Massachusetts' Infraredx has hauled in a $25 million equity investment from partner Nipro, cash the company will use to push its intravascular imaging system in Japan's hulking market.

Infraredx expects to win Japanese approval for its TVC Imaging System in the first half of next year, and the $25 million raise will help it hit the ground running in what the company said is the world's largest intravascular imaging market.

With Japanese approval on the horizon and Nipro's sales force at the ready, Infraredx can take on the Japanese market's three largest intravascular imaging players: Boston Scientific ($BSX), Volcano ($VOLC) and Terumo. And while the company will have some catching up to do, CEO Donald Southard believes TVC's combination of imaging technologies will more than make it stand out.

"They all use ultrasound to size the lesions in the coronaries, but we've added spectroscopy," Southard said in an interview. "Not only can we tell the size of the stenosis, but we can also tell what the stenosis is made of, whether calcified plaque or living, lipid-rich cholesterol."

That difference is key to predicting whether patients will suffer serious cardiac events during stenting, as lipid-core plaque is strongly related to heart attack and Infraredx's spectroscopy technology is a proven method of detecting the fatty arterial buildup, he said.

Japan accounts for about half the global market for intravascular imaging, Southard said, as Japanese cardiologists are far more likely to use guided imaging before placing a stent. Roughly 75% of Japanese stenting procedures use intravascular imaging, he said, compared to less than 20% in the U.S. Add that to the country's aging population and favorable reimbursement climate, and Infraredx believes its technology has a chance to shine in the biggest market.

Nipro's investment follows a 2012 deal between the two, a 5-year agreement under which the Japanese healthcare conglomerate gets exclusive rights to distribute TVC on the local market and Infraredx is guaranteed at least $50 million in related revenue. The $25 million buys Nipro a roughly 12% share of Infraredx, the company said, and a member of Nipro's management team will join its board.

TVC won FDA approval in late 2011, and while the U.S. market isn't quite as lucrative as Japan's, Infraredx has plans to expand on its home turf. The company has amassed an 1,800-patient registry to study the device's benefits outside of intravascular imaging, Vice President of Marketing Grant Frazier said, and Infraredx believes TVC could have lucrative applications beyond safer stenting.

Nipro's $25 million will fold into Infraredx's Series E funding round, which now sits at around $75 million, CFO Mike Guarasci said. The company has raised about $175 million since its founding in 2000.

- read the announcement

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