Minnesota outsourced device developer raises $20M in first equity deal in 20 years

Minnetronix CEO Rich Nazarian

Minneapolis-based Minnetronix was founded in 1996 to offer engineering and manufacturing services to medical device companies. Now, it's raised its first equity capital since its inception with a $20 million investment from Altaris Capital Partners that gives the healthcare private equity firm a minority stake.

The upstart was founded by a trio of former 3M ($MMM) engineers--all of whom remain Minnetronix executives, with one of them, Rich Nazarian, still serving as president and CEO. The company's first project was a federally funded joint effort in conjunction with 3M Cardiovascular Systems Division and Penn State University to create a software-driven controller for a total artificial heart.

In 2009, after developing almost 100 devices for clients large and small, Minnetronix created its own New Ventures Group tasked with accumulating intellectual property so that the startup could start creating its own devices. The investment is slated to help it grow both the service side of the business, as well as its own product development efforts.

"Our team at Minnetronix is passionate about improving patients' lives," said Nazarian, president and CEO of Minnetronix. "We've developed technologies large and small through the years and are seeing a growing need for innovative technologies in underserved areas that tend to be overlooked because they aren't multi-billion dollar markets."

He added, "We believe this is an important business niche, and the investment by Altaris will help us accelerate our mission to develop and deliver devices that benefit patients and the physicians who care for them."

Cerebrospinal Fluid Treatment--Courtesy of Minnetronix

Top priority for development at the company, which has more than 200 employees, is its Cerebrospinal Fluid Treatment for neurological diseases. In a patient with a subarachnoid hemorrhage caused by a ruptured aneurysm, the technology is intended to filter out red blood cells from the cerebral spinal fluid, thereby potentially reducing patient exposure to the cytotoxic byproducts of degrading red blood cells.

The company has at least three other proprietary technologies: a device connectivity platform, customized power and control tech for ventricular assist devices (VADs), as well as a concept for a percutaneous ventricular assist device (pVAD).

"We were attracted to Minnetronix' track record of serving the development and manufacturing needs of its medical device customers, their deep understanding of the medical device industry, and their innovative approach to developing proprietary technologies and products," summed up Altaris Managing Director George Aitken-Davies in a statement.

- here is the announcement