June 21, 2012
Dow Jones VentureWire
EndoGastric Solutions Raises $13M, Sees Valuation Rise to $87M
Medical-device maker EndoGastric Solutions Inc., whose products enable surgeons to reach a patient's esophagus and stomach without making an incision, has raised a $13 million Series F extension to continue product development and clinical research, the company said.
The funding, which is an add-on to the company's $30 million Series F round raised in 2010, was provided by Advanced Technology Ventures, Canaan Partners, Chicago Growth Partners, De Novo Ventures, Foundation Medical Partners, Oakwood Medical Investors and Radius Ventures, the Redwood City, Calif.-based company said.
Chief Financial Officer Ken Ludlum said the company has now raised a total of $138 million from investors, and has a post-money valuation of $87 million.
Looking at an IPO market that resembles a wasteland, the company aims instead to grow large enough to pull in $100 million in annual revenue, Mr. Ludlum said.
"We have a little ways to go," he said, declining to give specific sales figures for the company, which was founded in 2002.
The company's devices were approved by regulators in 2007, and are meant to treat gastroesophageal reflux disease, or GERD, which can degrade the valve that separates the stomach from the esophagus, said company spokeswoman Lan Nguyen.
To repair the valve, surgeons today cut open the patient to access a part of the stomach, the gastric fundus, in order to wrap it around the lower esophagus, Ms. Nguyen said. This recreates a natural barrier to prevent stomach acid from refluxing into the esophagus.
EndoGastric Solutions aims to bring the same clinical benefit in a much less invasive fashion. Using the company's patented devices and sophisticated imaging technology, doctors can lower several pieces of equipment down a patient's throat and into the junction between the esophagus and stomach, where the valve can be repaired, Ms. Nguyen said.
The company's approved devices include the StomaphyX, a device for reducing the size of the stomach pouch, and the EsophyX, a device for repairing damage to the esophageal valve, company information said.
In 2009, the Society of American Gastrointestinal and Endoscopic Surgeons praised noninvasive approaches, saying that endolumenal and translumenal therapies have potential to treat many common gastrointestinal conditions as effectively as more traditional invasive procedures.