|SetPoint Medical CEO Anthony Arnold|
Based: Valencia, CA
CEO: Anthony Arnold
The Scoop: Patients with many inflammatory diseases can currently turn only to biologics for relief, relying on drugs that, while effective for many, often bring black-box warnings, high costs and no shortage of trial and error. SetPoint Medical is developing a nerve-stimulating implant that could provide a cheaper and more effective solution for patients with ailments like rheumatoid arthritis (RA) and Crohn's disease.
What Makes It Fierce: With its dime-sized implantable device, SetPoint has its sights set on the roughly $30 billion global market for anti-inflammatory biologics. The iPad-compatible device is designed to stimulate the vagus nerve in the brain and trigger the body's inflammatory reflex without the need for drugs.
And SetPoint isn't alone in seeing the promise. The company has raised $46 million since its foundation, in August closing a $27 million round headlined by Boston Scientific ($BSX), Covidien ($COV) and GlaxoSmithKline's ($GSK) newly launched Action Potential Venture Capital fund.
As CEO Anthony Arnold explains, SetPoint believes its tiny device can clock the same efficacy as biologic treatments with much less risk. With drugs, patients must endure the trial and error of ferreting out just which immunosuppressant works for them, all while chancing potentially severe side effects. With SetPoint's technology, the chief risk comes in the 45-minute implantation procedure, after which the device suppresses all the major cytokines that promote inflammation, Arnold said, restoring them to natural levels.
SetPoint has had little trouble making its pitch to investors, Arnold said, as its implant creates a net benefit for all stakeholders: Patients and physicians get a low-risk, high-efficacy alternative therapy, and payers get a cost-cutting method of treating prevalent disease.
"For payers, we go in and say, 'What do you pay for biologic agents?'" Arnold said. "It's around $32,000 a year per patient. We can come in with a device that has paid itself off with a set-it-and-forget-it lifestyle in two years. Put it in, program it, check it once or twice a year."
But, first, development. SetPoint is about 18 months out from applying for a CE mark, Arnold said, and the company is initially targeting RA and Crohn's disease, keeping an eye on ulcerative colitis and psoriasis. The device completed a first-in-human study last year, reducing the severity of RA in 6 of 8 patients who didn't respond to the drug methotrexate and sending two patients into remission.
What To Look For: With some RA data in the bag, SetPoint wants to start up recruitment on an inflammatory bowel disease study this winter, thereafter deciding which indication to chase in a randomized trial. That's where one of SetPoint's in-born advantages comes into play, Arnold said: The company's founder, Kevin Tracey, is president of the Feinstein Institute for Medical Research, and SetPoint owns space and time with experts at the New York think tank, helping it make the right clinical decisions and speed development.
SetPoint snags $27M from GSK, Covidien
-- Damian Garde (email | Twitter)