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Diality Raises $28M For Dialysis Device

Irvine-based Diality Inc., a maker of a medical device to treat kidney diseases, raised $28 million in its latest funding round to support the company’s effort to bring to market what it calls a paradigm shifting hemodialysis system.

The company’s blood filtering product is initially expected to be used by medical professionals in a variety of settings, and later could be used by patients and their caregivers.

Investors were impressed that Diality has a device “that is really talking to what the market needs,” Chief Executive Osman Khawar told the Business Journal.

Khawar declined to identify the investors, noting they included individual and institutional investors.

The new funding follows a $24 million Series B2 raise last year from private investors. The firm has now raised about $82 million since its start in 2015.

$7B Market

More than 600,000 patients receive dialysis in the U.S. and the total addressable market for Diality’s hemodialysis system, which acts like an artificial kidney, is estimated at over $7 billion.

Currently, about 86% of dialysis is conducted in specialized clinics where a patient on average is hooked up to a machine for four hours each time during three different weekly visits.

The secret to Diality’s system is “prescription flexibility” that enables kidney care providers the ability to vary the dosages.

“We want to offer the treatment that the patient wants,” Khawar said. “Right now, that flexibility is not available to most patients.”

It’s also aiming to make its hemodialysis machine available in a variety of places outside specialized clinics, such as nursing homes and hospitals.

Khawar, a practicing kidney specialist known as nephrologist, wants to make the device so simple that even non-experts can ultimately use it, including in their homes.

“Our goal is to provide the most flexible hemodialysis system that can be used in any healthcare setting, including the home,” Khawar said.

Flow Rates

Devices offered at homes have lacked the power needed to work five hours at a time, Khawar said.

Diality says its hemodialysis system achieves the flow rates of in-center systems.

“While meaningful progress has been made in the development of hemodialysis devices, a major shortfall remains in the market for a hemodialysis system that truly meets the needs of all care settings,” Diality Chief Business Officer Dan Guthrie said in a statement.

“With the ability to achieve dialysate flow rates up to twice those of the competitors in the category, Diality’s hemodialysis system allows for fewer treatments per week or shorter time per treatment, achieving standard dialysis efficacy metrics more efficiently than existing devices in the category,” he said.

The Plan

The company’s most recent fundraising campaign will be used to obtain a 510(k) approval from the Food and Drug Administration.

Approval would enable the company’s commercial launch next year in hospitals, skilled nursing facilities and de novo clinics.

The funding will also support a clinical trial to test the device in the homes. The clinical trial is a prospective, non-randomized, multicenter, open-label study to be filed under an Investigational Device Exemption.

The company currently has 60 employees, most of whom are in Irvine. It’s hiring for its clinical work and commercial team, Khawar said.

Khawar, who obtained his MD from the University of Glasgow and his MPH from Johns Hopkins, is an experienced clinical researcher and entrepreneur who has run several businesses in the dialysis industry including a clinical research company and several dialysis units in San Diego.

He currently serves on the Palomar Health Foundation Board.

Khawar is aiming to make the “next-generation device” for kidney treatments.
“We are positioned for the future treatment paradigm,” he said. “Our device is really trying to bring this ability to a new level.”

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Sonia Chung
Sonia Chung
Sonia Chung joined the Orange County Business Journal in 2021 as their Marketing Creative Director. In her role she creates all visual content as it relates to the marketing needs for the sales and events teams. Her responsibilities include the creation of marketing materials for six annual corporate events, weekly print advertisements, sales flyers in correspondence to the editorial calendar, social media graphics, PowerPoint presentation decks, e-blasts, and maintains the online presence for Orange County Business Journal’s corporate events.

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