Direct Flow Medical - 2014 Fierce 15

CEO: Bernard Lyons
Based: Santa Rosa, CA
Founded: 2004
Website: www.directflowmedical.com

The scoop: Taking on the big med tech players on their established territory is a tough row to hoe for any startup. But that's precisely the route Direct Flow Medical has opted to follow. It has a transcatheter aortic valve system that's designed to eliminate aortic regurgitation and to make the positioning during surgery easier for physicians. Its TAVR product has an inflatable, double-ring structure that's a different take on the category from the products marketed by segment giants Medtronic ($MDT) and Edwards ($EW).

What makes Direct Flow Medical Fierce: Direct Flow originally came out of conversations between the founders and physicians regarding the deficits of the existing TAVR technology, which was just starting to become standard. Before catheterization became standard, the only option was surgical valve repair.

Courtesy of Direct Flow Medical

"If this does become standard practice, what do we need to make it even more generalizable so that all patients can have a transcatheter valve rather than surgical valve repair?" Direct Flow President and CEO Bernard Lyons told FierceMedicalDevices in an interview.

He noted that the tech from the market leaders is difficult for physicians to position perfectly and that the open, mesh metal design allows blood to flow through it. Direct Flow's device is more like what's used in balloon angioplasty. A surgeon who is inflating and placing it has multiple options. And with the two inflatable seals, perivalvular leaks are virtually eliminated, Lyons noted.

"Once a physician has decided the valve is perfect, at an optimal level, they exchange saline for proprietary polymers. Then they disconnect the wires and it becomes a permanent polymeric structure," he summed up.

"We have gotten approval for an additional two sizes; we can treat the widest range of sizes of any company with the same delivery system," Lyons said. "We have the only device that can be placed without the use of contrast during deployment." He noted that the use of contrast during the procedure is a problem for at-risk patients like the elderly and patients with existing kidney disease, since contrast can cause acute kidney injury.

What to look for: Direct Flow expects to be the third transcatheter valve on the market in the U.S. Its pivotal U.S. trial started in June, and enrollment is expected to take about a year. The trial will be on about 650 patients at 30 U.S. and EU centers; it is nonrandomized and prospective. Once enrollment is complete in May or June of next year, there will be a one-year follow-up period. So, Lyons expects Direct Flow will have the data by mid-2016 with a potential approval in early 2017.

Last November, Direct Flow got up to $50 million in debt from private equity investor PDL BioPharma ($PDLI). After spinning off R&D-focused Facet Biotech in 2008, which was subsequently acquired by Abbott Laboratories ($ABT) for $450 million, in 2011 PDL became focused on not just collecting royalties but also using them to invest in late-stage companies with revenue streams that it could use to take a royalty interest.

Direct Flow venture investors include Abbott Ventures, EDF Ventures, ePlanet Ventures, Foundation Medical Partners, Johnson & Johnson Development Corporation, New Leaf Venture Partners, Spray Venture Partners and VantagePoint Venture Partners.

Lyons said the company's existing financing is sufficient for it to set up marketing in Europe and to complete the U.S. pivotal trial. -- Stacy Lawrence (email | Twitter)

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Direct Flow Medical - 2014 Fierce 15
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