San Clemente-based VertiFlex Inc. has another $14 million in its coffers as it goes about bringing a medical device for less-invasive treatments of painful spine problems to market.
VertiFlex’s main device is Superion Interspinous Spacing, which is used for treating lumbar spinal stenosis, or a narrowing of the spinal canal. The condition causes severe back and other pain and is diagnosed in about 1.2 million individuals each year in the U.S.
It’s “a very big problem for people as they age—it’s just part of aging,” said Scott Lynch, vice president of global marketing for Vertiflex.
The $14 million came in a fourth round of funding, with a provision for an additional $14 million investment within 12 months.
Returning investors Aberdare Ventures and Alta Partners, both of San Francisco, and New Enterprise Associates of Menlo Park participated in the latest round of funding for VertiFlex. Stamford, Conn.-based Thomas, Mc-Nerney & Partners also put in money.
Superion is implanted into patients through a single small dilation in the patient’s back under local anesthesia or on an outpatient basis as an alternative to invasive surgeries where bone is cut away
• Headquarters: San Clemente
• Founded: 2005
• Business: medical devices
• Notable: Sole focus on Superion device for lumbar spinal stenosis, seeking FDA approval
New Investor
Thomas, McNerney & Partners invested in VertiFlex because it “strongly (believes) in the role interspinous spacers play in the continuum of care for lumbar spinal stenosis,” said James Thomas, the firm’s cofounder and partner.
VertiFlex declined to say how much money it’s raised overall.
Reports from researcher Datamonitor’s Financial Deals indicate the company has raised $50.7 million in the past three years, including its most recent round.
VertiFlex is using the money to complete enrollment in a 400-patient clinical trial for Superion before the end of this year and for global market development.
“We’re more than two-thirds through enrollment (for the trial),” Lynch said.
Superion has had European regulatory clearance since 2007, but Lynch said that VertiFlex has decided not to use its funding to establish sales there at this point.
Selling overseas “is really not part of our approach from a company standpoint,” he said. “We’re not trying to commercialize this in Europe.”
Other companies in Orange County also are working on treating lumbar stenosis.
One is Vertos Medical, which is based in Aliso Viejo and offers a “mild” device and system, which differs from Superion.
Some larger device makers are involved in the interspinous spacer market as well, including Minneapolis-based Medtronic Inc. with its X-Stop spacer.
X-Stop Comparison
Superion’s clinical trial is comparing the device’s safety and efficacy to X-Stop in patients with moderate lumbar spinal stenosis.
“That was negotiated with the FDA,” Lynch said. “X-Stop is the only product on the market that is similar to what we do; theirs is just much more invasive.”
VertiFlex still is some years from offering Superion commercially.
Superion’s clinical trial requires its subjects to be followed for two years and Lynch said that he didn’t expect data from the last patient to come in until 2013 or 2014.
“It usually takes at least a year to get through the FDA process,” he said.
When VertiFlex is ready to commercialize Superion, it will either develop its own sales force, work through distributors or sell the device to a larger company, said Lynch.
“Much like Medtronic acquired the X-Stop device and now owns it, someone could eventually acquire us and then distribute (and) commercialize the product,” he said.
If that doesn’t happen Lynch said VertiFlex will bring Superion to market on its own.
Sole Focus
The company is concentrating solely on Superion. Last year, it sold its Silverbolt screw business line, which made components to fuse spines together, to Gainesville, Fla.-based Exactech Inc.
The deal left the company without any products ready for sale.
VertiFlex, which has 25 workers, was founded in 2005 and previously was known as DK Spine Technology Inc.
The company was started with technology licensed from Stanford University in Palo Alto. It moved to the county from Carlsbad in 2007.
Earl Fender, its chief executive, joined the company in 2008 from Pennsylvania’s Synthes Inc., which is being bought for $21 billion by device behemoth Johnson & Johnson. Fender’s career also includes 10 years at DePuy Spine, a J&J company. n