Split Rock, SV, Bankroll Sinusitis Device Start-Up, Entellus
August 13, 2007 - Maple Grove, Minn. - by Brian Gormley
Split Rock Partners and SV Life Sciences are bankrolling start-up Entellus Medical Inc. in hopes of bringing a new, minimally invasive surgical tool to a market that VCs historically have avoided: diseases of the ear, nose and throat.
In May the firms co-led a $9 million Series B round for the Maple Grove, Minn., company, which expects to launch a device used to treat sinusitis, or inflammation of the sinuses, next year. Some 35 million Americans have the condition in acute or chronic form.
Entellus formed in April 2006 and raised a $3 million Series A from SV and Split Rock in August of that year, said Chief Executive Thomas Ressemann, who most recently was an executive of Velocimed LLC, a cardiovascular device maker that merged with St. Jude Medical Inc. in 2005. The Vertical Group and Warburg Pincus were two of Velocimed's principal venture backers.
The Series B gives Entellus enough cash to launch the technology. It initially will roll it out in certain, densely populated regions, Ressemann said, though it hasn't decided which areas it will target first.
Because device investors have focused on cardiovascular companies, like Velocimed, and on those targeting fields like back pain or gastrointestinal disorders, traditionally they've paid little attention to the ear, nose and throat sector, said SV Managing Partner David Milne, a member of the Entellus board. But ENT doctors are open to adopting new technologies, even though they haven't seen as many as physicians in other specialties, he said.
With conventional markets becoming saturated, more firms are moving into less-competitive areas, including ENT conditions, said Split Rock Director Josh Baltzell, also a board member. Earlier this year Vertical Group and Prism VentureWorks provided $6.3 million in first-round financing to Entrigue Surgical Inc., a stealthy San Antonio start-up also targeting this area.
Firms also are drawn to the success of Acclarent Inc., which formed in 2004, and in 2005 launched devices used to treat sinusitis through an endoscopic, catheter-based procedure. Versant Ventures, New Enterprise Associates and Delphi Ventures are among the backers of the Menlo Park, Calif.-based company.
About one million sinusitis patients have a severe, chronic form and are eligible for functional endoscopic sinus surgery, in which a surgeon removes diseased bone and tissue.
Though effective 80% of the time, only about 400,000 in the U.S. elect to have the surgery each year, largely because recovery is difficult, according to Ressemann, who said he underwent the procedure about seven years ago. Though it relieved his sinusitis, "it was one of the most painful things I've ever gone through," he said.
Entellus isn't disclosing details about its technology, but Ressemann said it will make it possible to remove diseased tissue less invasively and under local instead of general anesthesia. Pain and bleeding would be reduced, and patients could return to work the next day. Sixty percent of chronic patients would be eligible for the minimally invasive procedure, he said. Severe cases would still require conventional surgery.
Entellus soon expects to begin a pilot study that will enroll up to 40 patients. Later this year it hopes to receive 510(k) clearance to market the device, and by year's end it intends to launch a pivotal study to support reimbursement. In that trial it aims to show that its minimally invasive surgery is as effective as conventional surgery and that it also speeds recovery.
Reach Entellus Medical at 763-463-1592.