NeuroVista Raises $21.5M More Through VC Round and Investment From Cyberonics

[Updated and corrected: 1 pm, 9/9/10] Seattle-based medical device developer NeuroVista has raised $16.5 million in equity financing led by Australian firm GBS Venture Partners, and an additional $5 million through a convertible debt agreement with Houston, TX-based Cyberonics (NASDAQ: CYBX), a medical device firm specializing in the treatment of epilepsy and other neurological disorders.

[Correction: An earlier version of the story said NeuroVista was founded in 2005.] NeuroVista, founded in 2002 and headed up by local entrepreneur and medical device innovator John Harris, is developing an implantable device designed to predict epileptic seizures before they happen, and warn patients in advance. While some seizure patients can feel a seizure before it hits, many cannot. A device that could detect an oncoming storm in the brain’s electrical wave readout (known as an EEG) could give patients in the latter category enough time to take a fast-acting preventative drug, or find a safe place to lie down. The innovation could potentially help an estimated 750,000 patients in the U.S. alone, according to Harris, who gave Luke an exclusive interview when the company rolled out of stealth two years ago.

In 2007, NeuroVista raised $33.8 million in Series B financing from big-name firms including Advanced Technology Ventures, Delphi Ventures, and Foundation Medical Partners (all of which participated in the new round), and other early investors, Three Arch Partners and Sprout Group. In October 2009, NeuroVista raised an additional $6.1 million in debt, options, and securities, according to a regulatory filing.

The most recent round of financing, which closed last week, will go toward supporting ongoing clinical trials of the company’s Seizure Advisory System, as well as continued technological development. As part of the deal, GBS partner Steve Gourlay will join the NeuroVista board of directors.

“We believe that NeuroVista technology will revolutionize the management and treatment of epilepsy by resolving the uncertainty of when seizures are going to strike, improving patients’ quality of life, and enabling new models for the use of drug therapy,” Gourlay said in a statement.

In addition to the equity financing, and the $5 million convertible debt deal with Cyberonics, NeuroVista has also entered into a second license agreement with the medical technology company. The two companies made an initial agreement in October 2009, allowing Cyberonics to license NeuroVista’s technologies relating to a seizure detection algorithm, a rechargeable battery system, wireless communication, and an implantable lead. The second license will provide Cyberonics with additional technology related to an external recharging system for an implanted battery.

“Our technology collaborations with NeuroVista over the past year have proved to be very productive. We expect that this additional collaboration will further accelerate our technology development program, while the investment will enable NeuroVista to pursue its clinical studies,” said Cyberonics president and chief executive Dan Moore in a statement released yesterday. “We are excited that another leader in the field of devices for epilepsy has chosen to join us in helping to improve the lives of patients with epilepsy.”

In a separate statement, NeuroVista’s Harris said, “We are excited about the opportunity to broaden our relationship with a pioneer and leader in the field of epilepsy, and to assist Cyberonics in its continued innovation.”

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