TriVascular2, a recently-formed developer of endovascular repair devices for treating abdominal aortic aneurysms, has raised $65 million in Series A funding. MPM Capital and New Enterprise Associates co-led the round, with Delphi Ventures and Kearny Venture Partners also participating.
Some of the Series A proceeds will be paid to Boston Scientific, which is divesting TriVascular as a “non-strategic asset.” It had originally acquired the company in April 2005, from shareholders like Delphi and
TriVascular2, a company newly formed to develop novel endovascular repair devices to treat abdominal aortic aneurysms (AAA), announced today a $65 million Series A Preferred financing led by MPM Capital and New Enterprise Associates, Inc. (NEA) to acquire a subsidiary of Boston Scientific (NYSE: BSX) containing certain assets and intellectual property of its predecessor company TriVascular, Inc. MPM Capital is the largest venture capital investor dedicated solely to healthcare with $2.5 billion under management, and NEA is a leading diversified venture capital firm with $8.5 billion in committed capital. Joining MPM Capital and NEA as investors in the new privately held company are Delphi Ventures and Kearny Venture Partners, successor funds of the largest institutional shareholders of TriVascular, Inc. prior to its acquisition by Boston Scientific in April 2005. Taking seats on the new Board of Directors, along with the new company's CEO, will be representatives of MPM Capital, NEA, Delphi and
Boston Scientific elected to divest TriVascular as part of a
previously announced plan to divest non-strategic assets. A portion of the Series A financing will be paid to Boston Scientific as consideration in the transaction, and Boston Scientific will retain a
minority interest in the newly formed company. The remaining funds
have been earmarked to finance the continued clinical development of the company's novel endovascular repair devices over a two- to
three-year time frame. In addition the investors have reserved $30
million in subsequent funding intended to finance the company through the filing of a PMA. All legacy shareholders of the original
TriVascular prior to its acquisition were given the opportunity to
purchase preferred stock on the same terms as the venture syndicate or, if they qualified as accredited investors, to participate as common stockholders. The newly formed company will be housed in its former headquarters and manufacturing facility at 3910 Brickway Boulevard in Santa Rosa, California.
Michael Chobotov, Ph.D. will assume the post of President and
Chief Executive Officer, the role he held prior to the company's
acquisition by Boston Scientific. He will be joined by two other key
founders of the original TriVascular, Robert G. Whirley, Ph.D. as the
company's Vice President, Research and Development, and Joseph W. Humphrey, Ph.D. as Vice President, Manufacturing Technologies.
According to Dr. Chobotov, “The generous support provided by our
new investors, MPM Capital and NEA, along with the significant
financial contributions of our legacy investors, Delphi and Kearny,
underscores the market opportunities that our products address. By funding the continued development of TriVascular's novel lifesaving devices, a broader patient population requiring endovascular repair of aortic aneurysms, some not addressed with existing approved products, are expected to have an alternative to open surgical repair.”
From the initial approval of an AAA device in 1999, the market for
endovascular repair devices treating AAA and more recently, thoracic aneurysms (TAA) has grown rapidly to an estimated $500 million in 2006. By 2010, the market is forecast to reach $1 billion. The rupture of aortic aneurysms today represents the sixth leading cause of death in adults over the age of 65. Recognizing that the rupture of aortic aneurysms if not treated immediately is commonly fatal, CMS began in 2006 to reimburse for diagnostic imaging procedures to detect the development of aortic aneurysms in high risk patients.
Commenting from the investors' perspective, Jim Scopa, General
Partner of MPM Capital said, “While this transaction is not a
traditional venture capital investment, it clearly represents an
opportunity to acquire an attractive clinical stage asset as part of a
rationalization of a product portfolio by a major device manufacturer.
We at MPM and our fellow syndicate members believe this can translate to superior returns for our limited partners as we and the original TriVascular founders continue development of this powerful technology to address still unmet medical needs in endovascular repair. The opportunity to resume the company's product and clinical development efforts from within the manufacturing facility built out by Boston Scientific for TriVascular with the significant capital equipment still in place makes this investment possible.”