Financings roundup: TYRX raises $20 million in venture capital funding

Medical Device Daily Senior

Raising venture capital funding given this industry's current regulatory hurdles is difficult, but not impossible, one company has shown recently.

TYRX (Monmouth Junction, New Jersey) has raised $20 million in venture capital funding. New investor HLM Venture Partners led the round, along with previous investors Clarus Ventures and Pappas Ventures. The financing round included $4 million in debt financing from Comerica Bank.

TYRX sells implantable combination drug/device products focused on infection control, including the AIGISRx antibacterial envelope and AIGISRx Flat Sheet products. AIGISRx products contain antimicrobial agents, rifampin and minocycline, which have been shown to reduce infection by organisms representing a majority of the infections reported in implantable pacemaker and defibrillator related endocarditis, including “superbugs“ or MRSA.

“This continued investment from Clarus and Pappas Ventures, along with participation from new TYRX investor HLM Venture Partners, is a strong validation of TYRX's products and business strategy,“ said Robert White, CEO of TYRX.

It has been an eventful year for TYRX as it has reached a number of key milestones including implanting its AIGISRx device in more than 13,000 patients, including 510(k) clearance to market AIGISRx ST, an antibacterial product for the surgical repair of damaged or ruptured soft tissue.

But the most significant milestone, White told Medical Device Daily, has been implanting its AIGISRx device in roughly 14,000 patients. “In my mind the most important [achievement] has been the number of patients who have benefited from the technology . . . along with that we were able to publish our first clinical study a month ago that showed roughly three- to four-fold reduction of the high risk major infections relative to patients that did not have the technology . . . that's exciting to us,“ he said.

The company's first human clinical trial on 642 patients showed a 99.5% rate of successful implantation and demonstrating 70% fewer infections than some previous studies within the highest risk cohort of implantable defibrillator replacements. The study also showed no infections in patients receiving initial implantations of pacemakers or implantable defibrillators, the company noted.

Another noteworthy achievement for the company this year is the realization of more than $10 million in AIGISRx revenue since commercial launch, growing nearly 100% in 2010.

TYRX said it also completed the enrollment phase at 50 clinical study sites in two major new studies designed to measure infections and mechanical complications associated with implantable defibrillators. These studies will enroll a total of 4,300 patients.

“When I look to the future I'm encouraged. Sales continue to accelerate; we've doubled the business over the past year and I expect to do the same next year at a minimum,“ White told MDD. He also said the company is working on getting additional FDA clearances.

White knows that someday TYRX will face competition but right now that coast is clear.

“There is no one else out there that has anything along these lines so we are truly unique,“ White said. He added that the FDA environment has become increasingly challenging making it tougher for potential competitors to go through the review process.

In connection with the financing, Edward Cahill, a managing partner at HLM Venture Partners, will join the company's board of directors.

“We are excited to be partnering with Clarus and Pappas Ventures to finance TYRX in the pursuit of making AIGISRx the standard of care in the cardiac rhythm management space,“ Cahill said. “With over 500,000 critically important pacemakers and defibrillators being implanted annually in the United States, and an infection rate that is growing much faster than the growth in procedures, TYRX has a unique and powerful solution. Each infection typically costs between $28,000 and $58,000 but can exceed $100,000. In addition major infections carry a very high risk of death with one year patient mortality recently reported to be over 17%. TYRX is the leader in addressing this important patient safety issue and offers a meaningful improvement in the quality of patient care.“

While the company has been focused so far on the cardiac rhythm management space it is working to bring its products in the future to some additional areas outside of pacemakers and ICDs.

In other financing activity:

Ortho Kinematics (Austin, Texas), a privately held spine diagnostics company, reported the close of $2 million of new funding. TEXO Ventures led the investment, which also included participation by both original investors, PTV Sciences, and Gatebridge Investments.

The company said these new funds will enable it to expand its ongoing clinical study of the KineGraph VMA (vertebral motion analyzer) technology, pursue regulatory clearance, and hire key sales personnel.

“The confidence investors have shown us with this latest investment is a testament to the company's potential. The capital and collaboration provided by our investors will support our ambitious growth plans,“ said Adam Deitz, CEO and founder of Ortho Kinematics.

Ortho Kinematics is developing the KineGraph VMA technology for analyzing spinal motion, which is currently in clinical studies at seven sites across the U.S. and the UK.

The KineGraph VMA is a technology platform that is designed to be used in conjunction with standard fluoroscopy, which is commonly available in hospitals and clinics. Video images are captured of the spine in motion while patients are guided through a series of flexion, extension, and side-bending movements. Proprietary image recognition software is designed to track the intervertebral movement to produce information about the movement at each vertebral level. This information is intended to provide spine clinicians and researchers with data to assist in assessing spine pain patients.

Healthcare Realty Trust (Nashville) said it intends to offer 10-year senior unsecured notes through an underwritten public offering.

The company expects the proceeds from the offering will be used to repay, at maturity, its 8.125% senior unsecured notes due May 1, 2011, to repay borrowings under its unsecured credit facility, and for other general corporate purposes. The transaction is expected to be leverage neutral following the application of the proceeds to existing indebtedness and the repayment of the 2011 notes. Completion of the offering is subject to customary closing conditions.

Barclays Capital and UBS Securities are acting as active book-running managers for the offering.

Amanda Pedersen, 309-351-7774;
amanda.pedersen@ahcmedia.com