Upstart Veran wins $30M+ for lung cancer biopsy device, just as Medtronic starts trial on its own

SPiN Thoracic Navigation System--Courtesy of Veran

Veran Medical Technologies has won $30.6 million in venture financing to back its early lung cancer diagnostic and therapeutic device. The news comes just as industry giant Medtronic ($MDT) has launched a post-market, observational trial of its own early lung cancer diagnostic system.

Both sets of technology already are FDA-cleared. Veran expects to use its influx of capital to continue to expand in the U.S. and to move into international markets. The competition has heated up since CMS said it would cover lung cancer screening for smokers earlier this year, which is expected to translate into more biopsies.

St. Louis-based Veran has a pair of products: the SPiN Thoracic Navigation System, which enables an endobronchial biopsy of solitary pulmonary nodules for the potential early diagnosis of lung cancer, as well as SPiNPerc, which allows for a percutaneous needle-based procedure. The physician can choose either an endobronchial or percutaneous approach based on a map derived from a low-dose CT scan. The SPiNPerc can also be used for treatment such as ablation or drainage.

Medtronic's product, the superDimension system, is designed to conduct electromagnetic navigation bronchoscopy procedures, which offers a minimally invasive means of biopsy for early lung cancer diagnosis. The company started what will be two-year trial with up to 2,500 patients at 75 centers globally in April. Dubbed NAVIGATE, it's designed to identify how often physicians use the system to get biopsies from surrounding lymph nodes and to place markers or dyes to guide subsequent procedures to ablate or remove lungs.

Unlike the Veran system, superDimension isn't designed for percutaneous use or treatment, according to a head-to-head table comparing the two that was laid out by the startup. Medtronic gained the technology via its acquisition of Covidien, which in turn it had acquired in 2012 for about $300 million.

"We have been tracking Veran and the thoracic navigation space for a number of years, and we believe the company has reached an inflection point as it relates to clinical validation and market adoption with their innovative next generation platform," said River Cities Capital's David Kereiakes in a statement. River Cities led the round along with Versant Ventures. Kereiakes is joining Veran's board with the financing, as has Kirk Nielsen of Versant.

Existing investors Prolog Ventures, Advantage Capital, Rex Health Ventures, 3G Capital, Dynamic Investments and Vectis also participated in the oversubscribed round.

"With Veran's revolutionary technology and the recent CMS approval of lung cancer screening, the company has the potential to advance treatment for the millions of patients annually that are found to have a lung nodule," added Nielsen. "By providing the physician with best-in-class navigational tools, more patients will receive earlier definitive diagnoses that enables optimal care and the chance for improved clinical outcomes."

In February, the Centers for Medicare & Medicaid Services (CMS) issued a final recommendation that appropriate beneficiaries receive annual lung cancer screening with low dose computed tomography (LDCT). These can then lead to a subsequent biopsy. Eligibility for the screening is determined by the physician based on age, absence of signs or symptoms of lung cancer, a specific calculation of cigarette smoking pack-years and, if a former smoker, the number of years since quitting.

- here is the Veran announcement
- and here is the statement from Medtronic

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