IlluminOSS Medical, an early-stage medical device company that’s developing a minimally invasive internal fixation system for hand, wrist, clavicle and arm fractures raised $28 million from a syndicate of investors.
Scott Rader, president & CEO of the Providence, R.I.-based medical device company told MassDevice.com that the funding will provide working capital for 4 years as IlluminOSS looks to commercialize its Photodynamic Bone Stabilization System procedure in the European Union. The IlluminOss system is inserted completely within the internal confines of the bone through a small hole and the implant is then formed in place with gentle inflation, conforming to the inside of the bone to provide axial and rotational stability, according to the company’s website. Rader said the technology enables patients to walk just 1 day after surgery, with nothing more than a band aid.
"If you think about the transformation when we went from heart surgery to percutaneous catheterization, that’s really what we’re looking at here," Rader told us. "It’s an amazing transformation."
The company received CE Mark approval in the EU for the system back in March 2009 and employs more than 17 people in the U.S.
The investment round was co-led by Tekla Capital Management and Life Sciences Partners, with the full participation of existing investors Foundation Medical Partners, Mieza Capital and New Leaf Venture Partners. Four new investors also joined the round, including SR One, Excel Venture Management, Pappas Ventures and the Slater Technology Fund.
The IlluminOSS technology was created in 2006 by medical device veteran Robert Rabiner, following the sale of Selva Medical, the maker of a novel laser catheter for treating ischemic stroke, which was bought by W.L. Gore.
Rabiner told us he had been tinkering with the fundamental research for the IllumniOSS system shortly after selling Selva, "just playing around to see if it was real."
Shortly after, Rabiner said, he made an appointment with an orthopedic surgeon to ask if what he was doing made sense.
"He booked 15 minutes. I think he thought I was going to come in with another screw or rod, but 2 hours later we were still talking about this," he said. "My thought was this was going to be a binary meeting: I was going to walk in and someone would say, ‘That’s a great idea’ or ‘It’s not’ – either or. And my sense was, once we got the 2-hour meeting, it was an opportunity to talk to more people."
Wary of falling prey to his own hype, Rabiner next went to Foundation Medical Partners to see if the idea could get past the skeptics.
"Harry Rein looked at me and he said, ‘This is the most remarkably intuitive idea I’ve ever seen and at the same time remarkably fundable,’ so that was the ‘A-ha!’ moment," Rabiner told us.
But the latest funding round, IlluminOSS’s 3rd, did not come easy, Rabiner said, a product of the tough economic climate.
"I think any of the financing these days is more difficult than it was years ago, regulatory questions abound, the agency defines the path and that becomes a valuation issue. I think there’s a little more skepticism from the industry because there’s been some large players who have failed," he said. "People want to make sure there going to get something for their money and, as a result, you’re seeing a little more diligence and a little more skepticism and a little more, ‘Let’s go over that one more time.’"
