Adagio Medical Inc., a Laguna Hills-based device maker of a system that treats cardiac arrhythmias, closed a $42.5 million round of financing on Nov. 12.
The Series E round is among the largest reported financing round of an OC-based firm in the fourth quarter, and brings the company’s total funds to about $92 million since its 2011 inception.
New funds will support commercialization of its technology in countries in Europe, as well as clinical work for a pivotal trial in the U.S.
“Our team is really amped up because now that we’re in commercialization, we have the opportunity to help a lot of people,” Hakon Bergheim, chief operating officer of Adagio, told the Business Journal.
Adagio also plans to ramp its workforce, with an emphasis on clinical expertise and engineering talent. The company listed 20 open positions on its website at press time.
OC Connection
New investors ArrowMark Partners, RA Capital Management and Perceptive Advisors joined existing investors Fjord Ventures and JMR Capital in the round.
Adagio is a portfolio company of Fjord Ventures, a Laguna Hills-based medical device and product accelerator.
Other companies in Fjord’s portfolio include root canal treatment device maker Sonendo Inc., which has been among Orange County’s fastest-growing private companies the past few years (see story, this page).
Fjord was founded by Olav Bergheim, who is Hakon’s father and currently serves as chief executive of Adagio. Prior to launching Fjord, Bergheim was a general partner of Domain Associates, where he led a company creation initiative that produced San Clemente-based eye-stent maker Glaukos Corp. (NYSE: GKOS), which went public in 2015 and has a $3 billion market capitalization, among other healthcare-related businesses.
Bergheim previously spent 18 years in general management positions at Baxter Healthcare Corp., which spun off Edwards Lifesciences Corp. in 2000.
Another of Olav Bergheim’s sons, Bjarne Bergheim, serves as CEO and president of Sonendo.
Common Condition
An estimated 15 million people suffer from atrial fibrillation or ‘afib’—an irregular, often rapid heart rate—in Europe and the U.S. combined.
Of that group, about 5% of patients are treated with devices and only half of the patients with severe afib are free of the condition in one year, Hakon Bergheim said.
Cardiac ablation is a procedure used to destroy tissue that allows improper electrical signals to interact in the heart. These improper signals cause atrial fibrillation and other improper rhythms of the heartbeat.
Adagio’s cardiac ablation system, called the iCLAS, uses a cooling technology that reaches close to -200 degrees Celsius and freezes targeted tissue in the heart.
The key benefit of the technology is that it shortens the typical procedure times—from three to four hours—to about one hour for the most severe cases of afib, Bergheim said.
Other unique benefits of the system include a diagnostic tool that allows surgeons to read electrical signals in the heart during the procedure, as well as interchangeable ‘stylets’ or tubes that change the catheter shape to address varying anatomies.
“Physicians have really appreciated the flexibility of using one catheter anywhere in the heart,” Bergheim said.
Future Plans
Adagio received clearance to treat patients with afib in CE-marked countries in May. It established a team and European outpost in Germany.
Meanwhile, manufacturing activities have picked up at home to supplement commercialization and increased clinical activities. Adagio recently added a second production shift and expects to take space in a second building on Fjord’s campus soon.
The company is also conducting a 200-participant study, which will supply data for the company’s U.S. market approval.
It is aiming for market approval in the U.S. in late 2022.
“From the outset, it’s been our mission to transform how arrhythmias are treated,” Bergheim said. “We want to transform the industry by providing a better treatment option for patients, one that is safe and has much higher outcomes; and a better tool for physicians.”
Fjord Fosters Family, Fast-Growers
Laguna Hills-based Fjord Ventures, a life sciences incubator that invests in a variety of medical device, diagnostic and biopharmaceutical companies, shares a unique culture with its portfolio companies.
The companies, all of which count Olav Bergheim as a founder or co-founder, share two buildings totaling nearly 70,000 square feet and counts 360 employees combined.
Another thing the eight portfolio companies have in common: their names are all related to musical instruments or composition.
Besides Adagio Medical Inc.—meaning a slow tempo—portfolio companies include Prelude Corp., a molecular diagnostics and testing firm for early-stage breast cancer. Prelude began ramping commercial efforts this year for its risk assessment test, which predicts the benefits of radiation therapy for patients with DCIS (ductal carcinoma in situ).
Fast-Grower
Sonendo Inc. is Fjord’s best-known venture in Orange County.
The company raised an $85 million equity investment in January to for its GentleWave system, which uses a liquid solution and acoustic energies to clean a tooth’s root canal system.
The Sonendo technology that benefits an underserved market and has the potential to change the way endodontics is practiced today,” said Brooks Andrews, a partner with New York-based EW Healthcare Partners, which led the investment.
The company was Orange County’s fastest-growing private company last year with two-year revenue growth of 814% to $38.4 million for the year ended June 30, 2019.
It is led by Chief Executive Bjarne Bergheim and takes up almost all of one of the two buildings on Fjord’s campus.
