NinePoint Medical made it from seedling to commercial-stage company on the strength of a $33 million round. Now, with its optical imaging device starting to trickle into hospitals across the country, the Cambridge, MA-based company has reloaded with a fresh batch of cash.
NinePoint is announcing today that it’s raised a $34.5 million Series B round of equity financing. New investor Corning (NYSE: [[ticker:GLW]]) led the round, teaming with founding backers Third Rock Ventures and Prospect Venture Partners. Curt Weinstein, the managing director of Corning’s advanced optics and specialty materials division, has joined NinePoint’s board as part of the funding. Tom Miller, formerly of Siemens and Carl Zeiss, and Mark Stautberg, a sales and marketing specialist with stints at Boston Scientific (NYSE: [[ticker:BSX]]) and Baxter Healthcare, have also become independent directors. Ninepoint has now raised a total of about $68 million since its inception in 2010.
At first glance, Corning, the big specialty glass maker, might not seem to be the type of company to be the lead investor in a round for a medical device startup like NinePoint. But CEO Charles Carignan says the company has been NinePoint’s development partner on the optical probes used in the NvisionVLE system, the company’s only marketed product.
“It’s not typical for [Corning] to invest in companies like us, but they do have a life sciences group, albeit small,” Carignan says. “There was a good fit and a good level of interest from them, so we welcome them coming in as an investor,”
NinePoint formed in 2010, licensed technology from Massachusetts General Hospital, and created the NvisionVLE system based on it. That system uses what’s called opticalcoherence tomography, which doctors can use to look deep into living tissue and see large areas very quickly, allowing them to more efficiently and precisely pinpoint any suspicious areas that should be biopsied. NinePoint won its first FDA approval for the system in December 2011 and now markets it as a tool that doctors can use to microscopically examine the esophagus as part of a standard endoscopy procedure.
In the last year, Ninepoint has made the transition to a commercial-stage company. NinePoint began officially taking orders in May, and started shipping the system at the end of the summer, so it’s been focused on lining up customers and building up its manufacturing capabilities. Carignan wouldn’t give any specific numbers about the company’s run rate so far, however, only saying that NinePoint’s product is being used by doctors in “well north of 10” hospitals around the country.
“[Doctors are] starting to integrate it into a regular routine procedure that they do, which is what you want to have happen,” he says. “We’re very pleased.”
Carignan says that Ninepoint sells the imaging console for about $179,000, up about $30,000 from what it was before as the company has added some additional features. NinePoint sells the individual probes used along with it for $1,395 apiece, or $1,095 if a customer buys the console as well. NvisionVLE is covered by Medicare in every U.S. state except Florida, Carignan says.
With the cash, Ninepoint plans to add sales and manufacturing positions and bring its total headcount from about 65 to around 90 by the end of the year, Carignan says. The company will also invest in R&D. Ninepoint is developing a “tethered capsule” version of the system, for instance, which would package the same sort of imaging technology into a pill-shaped device that a patient would swallow in a doctor’s office. NinePoint is also considering using the system in other gastroenterology settings, like giving clinicians a detailed look at the bile ducts. It may also pivot into pulmonary imaging as well, Carignan says.
Still, the company faces an uphill battle. Mauna Kea Technologies, for instance, sells a similar product called the Cellvizio that’s based on a different technology—though Carignan contends “there’s a place for both [companies] in the field.” Big companies with massive client lists in imaging like Olympus and Fuji could also pose a threat by diving deeper into NinePoint’s space.
“They, as we’re successful, are all looking at, ‘how do you get on the advanced imaging bandwagon’?” Carignan says.
All of which means NinePoint will need to execute over the next few years to generate returns for its investors. The new cash should take NinePoint through the end of 2015. Carignan expects the company to have to raise more capital to get to break-even. At that point, if NinePoint’s been successful, it may be time to try to woo a buyer.
“The key thing is expanding our commercial footprint,” he says. “We really think if we continue to build value in the company through our commercial efforts, as well as our ongoing development efforts, that in that timeframe we could either just stay as an independent entity or likely get acquired.”
