Mainstay Medical bucks M&A trend, sets own course for neuromodulation

Mainstay Medical CEO Peter Crosby

Amid a wave of med tech M&A, Irish startup Mainstay Medical is bucking the trend and charting its own course to bring its innovative neuromodulation device to market.

As the Irish Independent reports, the Dublin-based company is eyeing a multibillion dollar market with its ReActiv 8 implant, a device that stimulates nerves in the back to contract muscles and provides a cure for chronic lower back pain. But unlike smaller outfits setting their sights on meaningful M&A, Mainstay isn't looking to sell, CEO Peter Crosby told the newspaper.

"Thinking about acquisition early on is generally a disaster. You have to focus on the business and growing the business," Crosby said. "Our strategy is to build a successful global company that's profitable and creates value for our shareholders. If someone else recognizes that value, then fine, let's have a conversation. But anyone who tells me they are building a company to sell is delusional."

So far, the company has made significant steps toward its end goal. In March, Mainstay won approval from Australian authorities to kick off clinical trials for its implantable neuromodulation implant, setting the stage for regulatory approval in Europe and the United States. In May, Mainstay raised €18 million ($25 million) through a previously announced European IPO to develop its implantable ReActiv8 device, collecting funds from existing shareholders including Fountain Healthcare Partners and med tech giant Medtronic ($MDT).

Manus Rogan, co-founder and managing partner of Fountain Healthcare Partners, said the VC firm saw potential in Mainstay's approach, so the decision to invest was relatively straightforward.

"We saw a huge market opportunity… Their data looked promising so we put our money to work to ask key questions in clinical trials," Rogan said (as quoted by the Irish Independent).

Still, Mainstay faces competition from bigger names on the block developing next-generation neuromodulation devices. In July, St. Jude Medical ($STJ) announced that it would purchase interventional pain management therapy manufacturer NeuroTherm for $200 million in cash, adding to its current offerings and grabbing a bigger piece of the market. Last month, Medtronic purchased Sapiens Steering Brain Stimulation for $200 million to get its hands on the company's deep brain stimulation system for neurodegenerative diseases and Parkinson's.

Not to be outdone, California-based SetPoint Medical is also hard at work on its neuromodulation device to treat chronic inflammatory disease. The company, a 2013 Fierce 15 honoree, touts its miniaturized implant as a game-changing treatment for patients with ailments like RA and Crohn's.

"A patient gets a device like this implanted once for one disease, and they're done," Tracey told The New York Times earlier this year. "No prescriptions, no medicines, no injections. That's the future."

- read the Irish Independent article

Special Report: So far, just 4 companies have a shot at winning the neuromodulation race

Suggested Articles

Boehringer Ingelheim tapped Healx to help identify new drug indications and leverage its AI to explore R&D options in neurological diseases.

CMR Surgical will have a new CEO at the top of the year, as it kicks off the global launch of its modular Versius system while awaiting FDA approval.

The ADDF announced its second round of research awards, with a total of $6 million in new funding for diagnostic tests.