Xeltis

CEO: Laurent Grandidier
Based: Zurich, Switzerland
Founded: 2006
Company website

The scoop: Xeltis is developing bioabsorbable heart valves using its proprietary Endogenous Tissue Restoration technology. They avoid the inflammation caused by other implants by dissolving within the body over time, thus enabling the heart to restore its normal function. The first therapeutic area in its sights is a rare pediatric congenital heart malformation, which currently requires the installation of a new artificial pulmonary valve every 5 years via open heart surgery. Healthy pulmonary valves facilitate the flow of blood from the heart to the lungs.

What makes Xeltis Fierce: Bioabsorbable (also referred to as bioresorbable) implants are the next paradigm in cardiology implants. So far, their use has been limited to coronary stents, but Xeltis aims to take them to the artificial heart valve arena. And while traditional drug-eluting stents work quite well, the deficiencies of traditional artificial valves for the conditions that Xeltis seeks to treat are quite severe.

The synthetic matrices biodegrade over time, during which new heart valves and blood vessels grow to replace the scaffolding.--Illustration courtesy of Xeltis

"They degenerate very quickly," said Xeltis CEO Laurent Grandidier in an interview, explaining that the long-term presence of a foreign material in the body triggers inflammation. The main implant used today is Medtronic's ($MDT) Contegra pulmonary valve conduit, the CEO said. Other times a homograft is taken from a cadaver, but they are not always available.

Xeltis Endogenous Tissue Restoration technology consists of a matrix of proprietary bioabsorbable polymers that are colonized by the patient's own cells. "The device is made in a way that allows the body to naturally heal," Grandidier said. As a result, if all goes as planned, Xeltis' pulmonary valve will free patients from constant revision surgeries, saving the healthcare system money in the process.

It's based on the 1987 Nobel Prize-winning work in supramolecular chemistry conducted by Jean-Marie Lehn, who is now one of the company's scientific advisers.

The device is sutured in place via open heart surgery.

The company has conducted two feasibility studies of its technology, including one of 5 children born with only one functioning ventricle instead of two. After one year all of them successfully grew their own blood vessels, according to the company website.

That condition was not the one that Xeltis aims to treat with its first device. Grandidier said the condition treated in the trial is too rare to develop a device around, but said the findings are a "steppingstone" toward the development of other devices.

In December, Xeltis raised €27 million ($34 million) in an oversubscribed Series B round. Amsterdam-based Life Sciences Partners and Paris-based Kurma Partners led the financing with participation from VI Partners, Zug and existing investors. 

What to watch for: The first-in-human implant of Xeltis' pulmonary valve is scheduled for next year. Grandidier said a European study is planned in the Netherlands, Germany and other countries on the continent, with a goal of CE mark approval in 2018. He's also had conversations with the FDA.

"What really helps is that we are not the first bioabsorbable implant on the market," he said in regard to getting the device past regulators. Abbott's ($ABT) BVS is the most successful bioabsorbable stent on the market in Europe and some emerging markets like India and Brazil. There are no FDA-approved bioabsorbable coronary stents.

The therapeutic area also works in Xeltis' favor. Medtronic's Contegra was approved via FDA's Humanitarian Device Exemption for devices that treat rare conditions (those that affect fewer than 4,000 Americans per year). Devices reviewed under the HDE pathway face a lower bar for demonstrating effectiveness.

In addition, the agency has been increasingly vocal about the need for more devices that treat pediatric conditions.

Still, the small addressable market is a limiting factor. But Grandidier says Xeltis is a "platform company" with ambitions to use its Endogenous Tissue Restoration technology for peripheral diseases and aortic valve replacement.

"We have a transcatheter aortic valve program running," said Grandidier, referring to the lucrative minimally invasive treatment paradigm that is transforming aortic valve replacement by eliminating the need for risky open heart surgery.

Transcatheter aortic valve replacements are already popular among elderly high-risk patients with a limited remaining life expectancy, but their long-term durability is unproven. That is one of the main barriers and risks to using conventional TAVRs in younger, intermediate risk patients, an area that is subject to a great deal of debate and research within the cardiology community.

A bioabsorbable TAVR would neatly dispense with durability concerns because it would dissolve over the course of a few years. "If we can bring a solution to that (durability) problem, we open up the possibility of treating all with the transcatheter approach," Grandidier said.

Transcatheter devices for mitral valve repair and replacement have also generated a great deal of interest. Industry bigwigs dropped a combined $1 billion in companies on that space over the course of two months.

But Grandidier said Xeltis isn't studying the application of its technology to that arena right now. After all, with no approved transcatheter mitral valve replacements on the market, and only one FDA-approved transcatheter device for mitral valve repair, trying to add a bioabsorbable device to the nascent market would be premature.

But bioabsorbable cardiology implants (whether transcatheter or not) are of interest to the likes of Medtronic as well. Grandidier did say that a takeover of Xeltis by a larger company could accelerate adoption of Xeltis' technology and bioabsorbable implants, but stressed that he is no hurry for an exit, saying the company and technology are still early-stage assets.

-- Varun Saxena (email | Twitter)

For more:
U.S. to vie with India for top bioabsorbable stent market after FDA approval
Xeltis gets $34M to develop biodegradable heart valves and vessels

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