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Kardium raises $340-million as B.C. heart device maker prepares for FDA approval, market entry
A Vancouver-area company that is poised to bring the most effective technology to market for treating a common heart problem has raised $340-million from investors.
Kardium Inc., developer of a treatment for atrial fibrillation (AF), said the deal, announced Wednesday, was led by Janus Henderson Investors, sovereign wealth fund Qatar Investment Authority, MM Capital, Piper Heartland Healthcare Capital, Eventide Asset Management and Eckuity Capital.
Existing backers including T. Rowe Price Investment Management Inc. and Durable Capital Partners also participated, plus an unidentified strategic investor. Hedge fund MM is the sole Canadian player in the deal.
AF is an irregular heartbeat disorder that affects more than 59 million people worldwide, and causes strokes and failures. Kardium, which has previously raised more than US$300-million, is one of several players bringing devices to market that treats AF with a method called pulsed field ablation.
Kardium could be poised for rapid commercial success after receiving Class 3 medical device approval from the U.S. Food and Drug Administration, which chief executive officer Kevin Chaplin said in an interview he expects this year. Few Canadian companies have received that stringent designation, reserved for devices posing the highest potential health risk.
Boston Scientific Corp. generated US$1-billion in sales from its PFA device in 2024, after winning FDA approval that year. Medtronic plc, an American-Irish company, expects similar sales for its PFA product.
'This is a huge market, and it's one of the fastest-growing areas in medtech,' Mr. Chaplin said.
Kardium has generated better clinical results than both rivals. In April, it published results from a study of 183 patients showing 77.8 per cent were free of AF 12 months after being treated with its technology, with no device-related 'primary safety events.'
Other developers of PFA devices reported between 0.7 per cent and 2.2 per cent adverse safety events, while their treatments kept 66.7 per cent to 73.3 per cent of patients AF-free for a year. A procedure using Kardium's technology also takes less time than with competing devices.
Kardium 'knocked it out of the park on that data,' said Janus portfolio manager Aaron Schaechterle in an interview. 'We think it has the strongest product in what in our opinion will be a close to US$10-billion market. The company should be able to generate its rightful share' of the category.
He added that Kardium's success will 'come down to execution. It's a small company with a single product going up against some of the biggest companies in cardiology and medical technology. That challenge requires a scrappy and entrepreneurial management team, and we believe the Kardium is up to the challenge.'
The 500-person company is expanding its manufacturing, now done at its facilities in Burnaby, B.C., and plans to hire hundreds of people to make and sell the product. Kardium expects to sell its devices for US$8,000 to US$10,000 each.
Kardium's technology combines several existing approaches that treat different aspects of AF into a single device designed to save time and improve results.
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The key is a three-centimetre-diameter disco ball-like globe with 122 golden, individually controlled electrodes. The sphere is flattened, encased in a sheath, inserted in a patient's femoral vein and threaded into the heart's left atrium. It is then expanded to sphere form and maps the inside of the heart to pinpoint where erratic electrical signals originate before destroying the problem cells.
The device was originally designed to burn the cells using radio frequencies. But in 2021, Kardium shifted to the emerging PFA approach, whereby its device sends rapid, high voltage pulses to rupture targeted cells, restoring the heart's normal rhythms without damaging adjacent cells like the older approach.
Kardium, established in 2008, grew out of conversations between Dr. Sam Lichtenstein, former head of the University of B.C.'s cardiac surgery division, and Daniel Gelbart, former chief technology officer of B.C. tech pioneer Creo Inc., whose name is on dozens of Kardium patents.
Dr. Lichtenstein was frustrated by limitations of existing tools to improve patient outcomes for heart conditions. He and Mr. Gelbart, now company advisers, brainstormed ideas to fix the problem.
Creo's former CEO, Amos Michelson, joined as chair to turn their ideas into a business. Former Creo employee Doug Goertzen became Kardium's first CEO (he's now president and chief operating officer).
Nine years after its founding, Kardium began human trials, which were successful. But it had to do a new trial after switching to the PFA approach.
Mr. Chaplin said that once Kardium gets FDA approval, it will seek approval from health authorities in Canada and Europe and aim to go public in 2026.
After a three-year drought for life sciences initial public offerings, the market has started opening up, with three IPOs by medical device companies on U.S. exchanges (CeriBell, Inc. Beta Bionics Inc. and Kestra Medical Technologies, Ltd.) since last fall.
David Martin, an analyst with Toronto life sciences investment bank Bloom Burton, said Kardium could also be an acquisition target.
'This has the potential to be best-in-class, which isn't always the case, therefore the potential here is substantial,' he said in an interview.
