ReShape raises $38M to market its new weight-loss balloon in the U.S.

ReShape Integrated Dual Balloon System--Courtesy of ReShape Medical

ReShape Medical is digesting $38 million in Series D financing as it seeks to commercialize its just-approved weight-loss balloon, which gives the obese a minimally invasive option that avoids the nasty side effects of surgeries, including malnutrition following duodenal switch surgery, which involves removal of most of the stomach.

HealthCor Partners Management led the round, which also included Endeavour Vision SA and previous investors, SV Life Sciences, New Leaf Venture Partners, U.S. Venture Partners and Venture Investors.

The money will support the Fierce 15 member's attempts to sell its ReShape Integrated Dual Balloon System. It's squaring off against Apollo Endosurgery's Orbera intragastric balloon. The rival devices were approved within weeks of each other in July and August.

Both weight-loss balloons reduce appetite by taking up space in the stomach after insertion through the mouth via an endoscope. While the Dual Balloon is ReShape's only product, Lap-Band maker Apollo has the advantage of sales experience due to its purchase of Allergan's obesity device business (including the then-investigational Orbera) for up to $110 million in December 2013.

"With more than one-third of U.S. adults considered to be obese and with very limited non-surgical weight-loss options, the market potential for the ReShape procedure is significant," said Dr. Michael Mashaal of HealthCor Partners Management in a statement. "We are impressed by data from the ReShape clinical trial and look forward to working with the company's experienced management team to fill the sizeable, unaddressed need in the global obesity market with this new treatment option."

In a clinical trial of 326 obese patients, those randomly selected for the Dual Balloon lost an average of 14.3 pounds after using the device for 6 months (6.8% of their body weight), while the control group lost an average of 7.2 pounds. And 6 months after the Dual Balloon was removed (or a year after initial implantation), the treatment group had lost nearly 10 pounds, meaning they kept off most of the weight that was lost while on the device.

In the clinical data cited by the FDA in its Orbera approval, patients lost an average of 21.8 pounds (10.2% of their body weight) after 6 months. The average weight loss with the balloon moderated slightly after the balloon was removed from the stomach to 19.4 pounds on average.

The Dual Balloon has been available in Europe since December 2011, while Apollo says more than 220,000 Orbera balloons have been implanted in more than 80 countries across the world.

"With this momentum and the positive feedback we are receiving from physicians across the country, the Company is in a strong position to make the ReShape procedure available to U.S. patients in need of a non-surgical option for weight loss and to achieve global leadership in non-surgical obesity treatment in the future," said CEO Richard Thompson in a statement.

ReShape's latest VC round means an IPO isn't imminent. Last year, Thompson told FierceMedicalDevices he would reevaluate the company's status as a privately held player upon FDA approval.

- read the release

Special Report: FierceMedicalDevices' 2014 Fierce 15 - ReShape Medical

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