San Antonio Hub To Foster Pediatric Medical Device Development

By Iris Gonzalez, Startups San Antonio The San Antonio-Austin hub of a pediatric medical device consortium ...

InCube, VelocityTX Join Work to Develop Pediatric Medical Devices

By David Holley, Xconomy Texas San Antonio—A group of San Antonio institutions are getting involved ...

BiO2 Medical lassos new round of private financing
August 19, 2011

Premium content from San Antonio Business Journal - by Sanford Nowlin

San Antonio-based BiO2 Medical Inc. has raised nearly $4.58 million to bring a new medical device to market that could prevent artery obstructions in critically ill patients, according to a recent securities filing.

The company will use the funds - raised this summer via an equity offering to 66 investors - as it works toward both FDA approval in the United States and a CE Mark, the certification needed to sell its device in Europe, according to CEO Christopher Banas.

BiO2's Angel Vena Cava Filter Catheter is designed to prevent deadly pulmonary embolisms that result when blood clots in patients' lower extremities travel to the lungs. Some 300,000 U.S. patients die from such blockages yearly, suggesting a vast potential market for the technology.

"We're right on our development schedule," Banas says. "Certainly, anytime you're bringing a new medical device, issues come up, but we've been able to address them as they have evolved. We've been very happy with our progress."

The company will spend a portion of the investment on its first human trials of the Angel Vena Cava Filter Catheter. It expects to launch that pilot study in two Colombian hospitals by year-end, testing the device in 20 patients.

"Any clinical experience helps us better understand the device," Banas says. "That's important as we move forward on approval in the United States."

BiO2 also has slated a portion of the new money for research and development on new generations of the catheter.

Karutz Flavin Wells Investment Bankers LLC served as advisor on the offering. It will collect $191,000 in sales commissions, the securities filing states.

BiO2 filed to make a $5.22 million equity offering, meaning it's cleared to raise more than $600,000 in additional funds, according to the document.

The latest round of financing comes on top of at least $6.7 million BiO2 raised through a separate equity investment a year ago. Officials also initiated a $1 million debt offering in late 2009 and collected $1 million from the Texas Emerging Technology Fund a year prior.

Banas and other BiO2 managers, including President Paul Castella, have a proven track record in developing medical technologies, and that's enabled them to raise money during a down economy, says Ann Stevens, president of BioMed SA, which promotes the Alamo City's biotech industry.

"Chris Banas, Paul Castella and their partners are serial entrepreneurs with a strong record in the medical device industry," Stevens says. "Their ability to raise funds in the challenging marketplace we face today says much about their management ability and their credibility with investors."

Banas worked with physician Julio Palmaz to develop an innovative stent technology licensed to Johnson & Johnson during the '90s in a highly publicized deal. And, in 2007, Volcano Corp. spent $63 million to snap up CardioSpectra Inc., an imaging company Banas co-founded with Castella.

"I think we've been steadily growing our management talent pool in San Antonio over the past 10 or 12 years," Stevens adds.

Meeting with the FDA
Banas declined to reveal the identity of BiO2's latest backers or to discuss details of its finances. But, according to its recent securities filing, the company has no current source of revenues.

Banas also would not say whether the company will need to go to the well for additional rounds of investments.

However, he did say BiO2 is making progress as it works through the complex regulatory approval needed in the United States and in Europe.

The company has scheduled a third-quarter meeting with FDA officials to review its plans and discuss the design for its clinical study.

It also expects to submit the required documents for its CE approval by the end of the year.

"We're in constant contact with the FDA, and we're looking forward to the meeting," Banas says. "Approval will require U.S. clinical study, and we're eager to get their input on the design for that study."



Stay informed. Subscribe to BioMed SA news alerts.