Houston’s Cyberonics (NASDAQ: [[ticker:CYBX]]), which makes an implantable neurostimulation device used to treat epilepsy and depression, says today it’s making a $4 million investment in San Diego startup ImThera Medical. Cyberonics says its investment could eventually total $12 million, providing that ImThera meets certain milestones.
The San Diego startup has been developing technology that fits neatly with Cyberonics’ core expertise in neuromodulation. As I wrote last year, ImThera has been developing an implantable neurostimulation device for treating obstructive sleep apnea (OSA), a sleep-induced condition in which the tongue relaxes and blocks much of the upper airway.
ImThera’s implanted device transmits low-current neurostimulation to the hypoglossal nerve, which controls multiple muscles of the tongue. The electric current causes the tongue muscle to tighten—as if the patient was awake—and pull the tongue back from the upper airway.
As a minority shareholder in ImThera, Cyberonics gains certain rights, including representation on ImThera’s board. In addition to the $12 million from Cyberonics, ImThera plans to raise as much as $4 million from private investors, targeting a Series C round that could hit $16 million.
In May, ImThera revealed plans to raise $2 million to advance its sleep apnea treatment in the European Union. The company says now it is pursuing regulatory approval in Europe, and plans to begin a pivotal clinical trial of its device in the United States “in the near future.” In the seven years since the company was founded, ImThera had raised a total of at least $7 million before the Cyberonics deal.
Cyberonics now markets its VNS (Vagus Nerve Stimulation) Therapy System in selected markets around the world. The implanted device transmits an electric current to the vagus nerve, technology that has been cleared by the FDA to treat refractory epilepsy and treatment-resistant depression.
