BioSig, EnteroMedics Raise New Funds
Two local medical device companies reported raising more than $10 million in financing this week in an improving fundraising climate for Minnesota medical businesses.
Golden Valley-based BioSig Technologies Inc. announced Monday that it had raised $4.5 million through a private placement. The money will help fund the company’s effort to commercialize its proprietary technology, which is designed to improve electrophysiology diagnostics such as an electrocardiogram (ECG).
On Wednesday, Roseville-based EnteroMedics Inc. said it secured $6.25 million in debt financing through the sale of convertible notes. The company announced plans to offer $25 million in notes in November and previously raised $12.5 million through the offering. EnteroMedics is developing a “neuroscience-based technology to treat obesity and metabolic diseases.”
The Golden Valley-based Medical Alley Association recently reported that Minnesota medical and life sciences companies raised $52.5 million in financing during the first quarter of 2016, topping the first quarter 2015 tally of $45 million.
Medical Alley tallies all types of financing for its report including angel investments, venture capital, and debt financing.
But Medical Alley’s tally is something of a moving target. After the group’s initial report, Cheryl Matter, vice president of Intelligence & Research for Medical Alley, acknowledges that the association continues to revise the numbers as they learn of additional deals. Deal watchers also need to be aware that different financing reports may count deals in different quarters. In early January, Minneapolis-based Zipnosis Inc. announced that it landed $17 million in financing; Medical Alley counted the deal in the fourth quarter of 2015.
While medical device companies have long dominated the state’s medical market, Medical Alley’s research found an uptick in investment in digital health companies.
“I think what’s unique about Minnesota and the opportunity here is even some of the traditional medical device companies are looking at digital,” said Matter. “We’re not surprised, but we’re really happy to see the continued growth in that sector.”
Both BioSig and EnteroMedics are publicly traded. BioSig has not yet started to sell its product; EnteroMedics is in the early stages of commercialization. Medical device companies typically lose money for years. It takes years to develop, test and gain FDA approval for new devices, but companies have no revenue until they can start selling products.
BioSig Technologies, which relocated its headquarters to Minnesota in 2015, reported a $9.5 million net loss for 2015. BioSig’s stock, which is traded over the counter, closed at $1.96 per share on Tuesday.
EnteroMedics reported a net loss of $25.5 million for 2015. In December, the company announced a reverse 1-for-15 stock split, but EnteroMedics’ stock has been trading below $1 per share since late March. On Tuesday it closed at 75 cents per share.