Mainstay Medical raises $15M in debt to fund trials of its nerve stimulator for back pain

The ReActiv8 implantable neuromodulation device--Courtesy of Mainstay

Ireland's Mainstay Medical announced that it now has $15 million in debt financing available for the approval and commercialization of its implantable ReActiv8 nerve stimulator to treat chronic lower back pain.

It appears the company is sticking to its go-it-alone strategy rather than being acquired by a bigwig with deeper pockets.

"Thinking about acquisition early on is generally a disaster. You have to focus on the business and growing the business," CEO Peter Crosby said in September at the conclusion of last year's summer of med tech merger mania. "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."   

The debt will go toward the commercialization of its Reactiv8 Neurostimulator. The device's stimulation, delivered twice a day for 30 minutes, causes the muscles in the lower back to contract, hopefully causing the brain to better control them in between stimulation sessions, according to the company's website. Patients can control the stimulation using a handheld, wireless remote control.  

The debt can withdraw in three tranches, including $4.5 available immediately. The other tranches can be accessed based on milestones related to the company's CE mark application for European approval.

Each tranche of debt must be paid for over 60 months, with no principle due in the first 12 months. The interest rate is a European reference rate (which is currently negative) plus 10.5% to 12.5%, according to a release.  

According to the company website, in 2014 the first subjects enrolled in its multi-center clinical trial to obtain a CE mark.

In addition, in May the company announced it received FDA's IDE approval to commence a clinical trial for the Reactive8 in the U.S. The device will receive approval (or rejection) via the agency's stringent PMA pathway.

Additional financing for the development and of Reactiv8 was raised via an €18 million (then $25 million) IPO in May 2014 on the Irish Stock Exchange and Paris' Euronext.

Originally founded in Minnesota, the company's shareholders include industry bigwig Medtronic ($MDT), seller of the Restore line of neurostimulators. St. Jude Medical ($STJ) and Boston Scientific ($BSX) are among the other large players that sell devices in the arena.

In fact, St. Jude just announced that it has received a CE mark for a spinal cord stimulation system labeled "MR-conditional." That means patients using the company's Prodigy MRI neurostimulator can safely receive MRI scans of the head and extremities if necessary. 

- read the release
- and the release from St. Jude

Suggested Articles

GlaxoSmithKline and AstraZeneca are considering forming a joint lab to help the U.K. expand its supplies for COVID-19 testing, according to Bloomberg.

The Trump administration quietly invoked the Defense Production Act to force medical suppliers in Texas and Colorado to sell to it first.

Millions of tests are urgently needed as the virus keeps communities across the country in lockdown and hospitals are overwhelmed with patients.