TheraNova LLC, the biomedical device incubator founded and run by CEO Dr. Daniel Burnett, is planning to raise $15 million to $20 million in new capital to advance the development of about six inventions into startups and through some milestones before seeking venture financing.
Dr. Burnett said in an interview that one of the inventions TheraNova is seeking to advance enables the detection and removal of blood clots around chest drainage sites during surgery. He said the concept will offer big costs savings by eliminating the risk of blood clots during chest surgeries.
TheraNova also is developing a noninvasive way to measure a surrogate of pulmonary pressure by monitoring a person’s breath. The technology is an improvement on a $20,000 wireless heart monitoring implant produced by CardioMEMS, which has since been bought by St. Jude Medical Inc. (STJ).
In addition, TheraNova is developing an artificial pancreas, which has been filed for pre-market approval with the Food and Drug Administration. Other technologies include an improved personal protection device that insures against the breathing in of pathogens.
“What we want to do is support these new concepts to further them and to knock off more milestone achievements before seeking venture financing,” Dr. Barnett said.
“We’d like to take each of these a little farther and complete a small pilot study to take them a little further before seeking outside capital.”
Dr. Burnett said the funding could be in any form including an investment in TheraNova, a pledge fund or the formation of a fund around TheraNova that invests in its inventions.
The model for what Dr. Burnett is trying to accomplish at TheraNova is Three Arch Partners, which was launched by surgeon/inventor Dr. Tom Fogarty, and venture capitalists Mark Wan and Wilfred Jaeger in 1993. Today, Three Arch manages more than $1 billion.
Among Dr. Fogarty’s inventions is the embolectomy catheter, which was the first minimally invasive device to remove blood clots. He also invited the stent-graft and the Fogarty clamp used in heart surgeries.
Dr. Fogarty was ousted by Wan and Jaeger in 2004.
According to its website, Three Arch Partners provides “young companies with access to relevant clinical and business resources, as well as capital. Three Arch has helped create, build and fund more than 100 important new healthcare companies. These companies have often become the clinical and market leaders in their respective fields, and have generated strong returns. The fund focuses on opportunities in medical devices and healthcare services, and less frequently in biotechnology.”
To aide its future capital raising needs, TheraNova recently hired Peter Hardigan, the former chief operating officer of Document Security Systems Inc. (DSS), as its vice president of corporate and business development.
Hardigan worked at DSS and its predecessor Lexington Technology Group from August 2012 to July 2015. Prior to that he was head of investment management and chief financial officer at Erich Spangenberg’s IP Navigation Group from August 2011 to October 2012.
“Peter is very intelligent and knows the space—he should do well,” Spangenberg said in an emailed message.
Hardigan also previously was licensing officer at Columbia Technology Ventures, the venture arm of Columbia University, where he led efforts to license the university’s medical inventions to the private sector.
In an interview, Hardigan said he was hired to help TheraNova grow and take on additional capital.
“I’ll be helping an innovator develop and fund its pipeline of inventions,” he said.
“Historically, TheraNova’s startups have been seed funded by grant and angel money. I’ll be helping them bring in professional capital earlier in the process to enable them to accelerate and expand their pipeline.”
That may include the formation of a fund with outside money to help the incubator develop new inventions into profitable enterprises.
“Raising a fund is an idea. It depends on how we to decide to fund the pipeline. These inventions typically need less than a million dollars to get from an idea to a startup.”
“Inevitably, we’ll be doing some hiring to build out the New York office,” he said.
“What TheraNova has is a small group of investor/inventors who have come up with interesting ideas in the acute care marketplace. It was conceived of as an IP holding company to develop the ideas of its investors.”
In most cases, TheraNova has been able to generate clinical data within a year of funding and with less than $1 million in financing.
Dr. Burnett founded TheraNova in San Francisco in 2005 with the help of Mayo Clinic physicians with venture capital experience who were seeking to advance their innovations.
He has a medical degree and MBA in engineering, medicine and business from Duke University and a bachelor of science degree in biomedical engineering from the University of Pennsylvania.
Under Dr. Burnett’s leadership, TheraNova has focused on developing innovations with a clear need in the clinic and marketplace. It also strives to improve outcomes for patients, reduce healthcare costs and improve access to healthcare.
It has 10 teams that are capable of end-to-end development of a product from idea to manufacture.
Since inception, TheraNova has raised more than $120 million of private capital to fund the commercialization of more than 15 medical technologies in significant markets ranging from obesity to sepsis.
The firm owns more than 40 issued U.S. patents and more than 60 pending applications in the U.S. Burnett himself is the inventor of the bulk of TheraNova’s patents.
The firm has completed 6 venture backed spinoffs with investors including: Boston Scientific and Allergen.
The spinoffs include: Portrero Medical, which provides technology for patient monitoring and treatment of sepsis; Channel Medsystems, which provides technology for treatment for heavy menstrual bleeding; EM Kinetics, which provides products for treatment for migraines and overactive bladder; Sequana Medical AG, formerly known as Novashunt, which provides products for treatment of Cirrhosis, liver cancer and CHF; BAROnova, which provides products to treats obesity.
Velomedix specializes in the development of a medical device to induce therapeutic hypothermia to ease recovery from serious health conditions including myocardial infarction, stroke and traumatic brain injury.
Consano Medical, TheraNova's seventh spinout, developed the minimally invasive Canary
Catheter sepsis detection and treatment technology. It has achieved proof of principle on SBIR grants from the NIH and is in the process of raising capital to execute its business plan.
Dr. Burnett also is CEO of Consano Medical. He also has served as CEO of Portrero Medical since July 2013. He’s been a director of Channel Medsystems Inc. since January 2009 and a director of EM Kinetics since August 2006.
In addition, he was chief medical officer of Sequana Medical AG from August 2005 to June 2009; he was chief technology officer of BAROnova from August 2005 to August 2008; and was CEO of Velomedix from 2006 to 2008.
Before that, Dr. Burnett was a general partner at Medventure Associates, a venture capital firm, from September 2003 to August 2005.
TheraNova also currently has 9 angel stage companies that have been supported by non-dilutive grant funding. Perikinetics is working on a treatment for Type 1 diabetes; Centese is working on technology for fluid drainage. VitalAir is working on treatments for heart failure; Gravitas is working on treatments for gastric residual feeding. Mimetic is working on a treatment for osteoporosis; eMBOLD is working on heavy menstrual bleeding; Ethonova is working on patient monitoring; J-Stat is working on venous pressure, while Shock is working on stroke treatment.
TheraNova has 8,000 square feet of office, design, prototyping and assembly space and a class 100,000 clean room for clinical and commercial builds.
Unlike most incubators Theranova develops its own ideas and as a result owns all the intellectual property until a company is spun out following venture funding.
All of Theranova’s “companies continuously file new IP to build ‘thickets’ to protect against close imitations by competitors.
When appropriate Theranova has the option of licensing its IP instead of developing and spinning out a company.
—To reach the reporter responsible for this story please contact Dan Lonkevich at 707 318-7899 or at email@example.com