Late last year, Acorn Cardiovascular Inc. liquidated its assets and formally shut down.
The New Brighton, Minn.-based company had struggled for years to convince the FDA to approve its mesh heart-support device.
Steve Anderson, Acorn’s former president, is now involved in a new medical device venture.
This time, though, the new company — Preceptis — is eschewing the PMA path for a lower risk device.
Anderson, who is Preceptis’ CEO, said the company is developing a solution that will allow ear, nose and throat specialists to perform ear tube surgeries safely on children right in their offices.
“Generally, kids that are 12 and older can withstand procedures in the office,” Anderson said.
He estimated that 1.3 million to 1.5 million ear tube surgeries on children are performed in the operating room every year.
“What we are doing is that we are trying to come up with solutions for moving those procedures out of the OR so that the kids do not have to undergo general anesthesia,” Anderson said in a phone interview. “We have come up with a way of safely delivering ear tubes right in the ENT’s office.”
While children’s safety is the No. 1 focus, an “added bonus” and one that will not go unnoticed these days, is the potential cost savings the device promises.
By transferring those surgeries out of hospitals and ambulatory surgical centers to the ENT’s office, health insurers can save 70 percent per procedure, Anderson said. Preceptis is also looking into moving those surgeries from the OR to the sedation units of hospitals.
Anderson and two co-founders have already raised seed capital that have funded prototypes and cadaver studies, but now more capital is required. Anderson is pursuing a dual capital model as he courts venture capitalists.
Based on market appetite, he wants to raise a minimum of $5 million and if he gets good traction, raise up to a maximum of $10 million. He would not specify how much the company has raised to date.
“Both models will complete all pre-commercial tasks,” Anderson said. “The higher model will initiate a limited commercial release.”
He hopes to complete fundraising sometime this year. So far, Anderson hasn’t seen any evidence of VC’s being gun-shy about Preceptis given the failure at Acorn Cardiovascular, which went from raising $100 million to insolvency.
“In fact, every large venture capital firm was having the same type of issues with the FDA with their Class III portfolio companies [as Acorn Cardiovascular],” Anderson countered. “We [at Preceptis] have had a lot of interest from different investment entities.”
Currently operating as a virtual company, Preceptis will be based somewhere in the Twin Cities metro area in the future.
