Monday, May 12, 2008

Corindus catches $12.8M in VC funds

By Ryan McBride

Amid exponential growth projected for the robotic catheter business, Newton startup Corindus Inc. has closed a major round of private equity financing to advance its technology in that market.

Corindus, which is developing a remote-controlled catheter system for cardiovascular surgeries, raised $12.8 million in a Series B round last month, according to federal documents. The big bet placed on the startup points to an opportunity venture investors see to introduce new products into the young market for surgical robotics, an analyst said.

"It's still a relatively immature market, (and) there's still a nascent market opportunity," said Jason Wittes, a medical devices analyst for Boston-based investment firm Leerink Swann LLC. "That's the biggest reason" venture capitalists have invested in private firms in this field.

Wittes said the annual global market for robotic catheters is now $30 million to $40 million, with the two leading firms -- Hansen Medical Inc., of California, and St. Louis-based Stereotaxis Inc. -- in the early stage of selling such products.

Yet Wittes said the market could grow to $1 billion within five years. Why? Robotic catheters give surgeons greater ability to maneuver the medical tubes in more complex parts of the body, enabling more endoscopic procedures to be done with the systems, he said.

There are several startups in New England jockeying to enter the growing market for surgical robotics, including Cardiorobotics Inc. (formerly Innovention Technologies), based in Middletown, R.I., and Heartlander Surgical Inc. in Westwood. Both of these firms aim to develop robotic devices that enable minimally invasive cardiac surgeries.

Corindus' main product, the CorPath system, is intended to allow physicians to control the movements of catheters through arteries during angioplasties with a joystick at a workstation just outside of the operating room, according to the firm. The system is not yet approved by the U.S. Food and Drug Administration.

Company officials didn't return calls to provide comments for this story.

Corindus, founded in Israel as NaviCath in 2002, says it spun off from the Technion Entrepreneurial Incubator Co. Ltd. in Haifa. The firm, which is now led by local medical devices veteran and CEO Frank Martin, moved its headquarters to the Boston area in 2005. Technion is listed as an investor in the firm along with New York private equity firm HealthCor Group, among others, according to a U.S. Securities and Exchange Commission filing.