Cardiac Concepts reels in $27 million

August 25, 2010 by MedCity News

Cardiac Concepts Inc., which is developing a neurostimulation device to treat a form of sleep apnea, raises $27.2 million in an equity offering.

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Cardiac Concepts Inc. raised $27.2 million in an equity offering, according to documents filed with the Securities & Exchange Commission.

The company, based in Minnetonka, Minn., is developing a pacemaker-like device that uses electricity to treat sleeping disorders.

Minnesota has become a bit of a hub for start-ups looking to correct breathing-related sleeping problems. Apnex Inc. of St. Paul is developing an implantable device that uses electricity to open clogged airways when a patient sleeps, a condition known as obstructive sleep apnea.

That device stimulates a nerve that forces the tongue to push forward, allowing the patient to breathe easier. Inspire Medical Systems Inc. of Brooklyn Park, a start-up that spun out of Medtronic Inc. (NYSE:MDT), is working on similar technology.

Cardiac Concepts is focusing on central sleep apnea, a disorder caused by the brain failing to send proper signals to the muscles that control breathing. CSA, which accounts for less than five percent of all sleep apneas, causes patients to constantly start and stop breathing during sleep.

Cardiac Concepts is marketing its device, called the RespiCardia System, for patients suffering from heart failure. The company believes CSA can worsen heart failure and even cause death. RespiCardia consists of a pulse generator implanted beneath the skin near the collar bone that delivers small amounts of electricity into the nerve controlling the diaphragm.

Last month, the company enrolled the first 40 patients in a pilot clinical trial that will be conducted around the world.

Cardiac Concepts’ investors include a host of high -profile venture capital firms: Affinity Capital Management in Minneapolis, Polaris Venture Partners, Three Arch Partners, Versant Ventures and Accuitive Medical Ventures. Dale Spencer, a prominent local medical device entrepreneur and investor, also serves on its board of directors.