Inspire Medical Systems has nailed down $14.5 million in a Series C round of financing, and the Minneapolis developer of neurostimulation devices to treat obstructive sleep apnea has big plans for the cash. The money infusion will fund patient follow-up for the company's STAR pivotal trial, which just finished patient enrollment and device implants. But the funding will also support an expanded commercial launch of the implantable device in Europe and a planned U.S. regulatory PMA submission to the FDA in early 2013.
Inspire's executives see major dollar signs here. They estimate that more than 15 million people in the U.S. alone suffer from the disorder, for which existing treatments aren't much help. Inspire president and CEO Tim Herbert said in a prepared statement that the company's push for regulatory approvals in the U.S. will also include a focus on gaining insurance reimbursement "so that this patient group will have access to our breakthrough technology." Other companies continue to focus on developing better ways to both diagnose and treat the disorder.
Obstructive sleep apnea happens when the upper airway collapses during sleep where breathing frequently stops for a minute or longer, causing fragmented sleep. The neurostimulation device is designed to give mild stimulation to muscles that control the bottom of the tongue, preventing it from collapsing and blocking the airway, the company explains.
Funding comes at a crucial juncture for Inspire, which announced, along with its new round of cash, that it finished recruitment and device implants for the STAR (Stimulation Therapy for Apnea Reduction) trial. Specifically, the company is testing its upper airway stimulation product in patients with moderate to severe obstructive apnea, both in the U.S. and Europe. Inspire is already selling the product in Europe, thanks to the CE mark approval it nailed down in 2010. And so far, the company says it has completed implants in Germany, Italy and the Netherlands. The new round of funding will help boost sales efforts in Europe.
Inspire was spun out of medical device giant Medtronic ($MDT) in 2007, and it is interesting that Medtronic is one of Inspire's new investors that led the new funding round, along with TGap Ventures. Previous investors, including Kleiner Perkins Caufield & Byers, US Venture Partners, Synergy Life Science Partners and GDN Holdings, also took part.
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