Inspire Medical Systems, Inc. announced today that it has completed a Series E financing of $40 million. The financing round was strategically timed to coincide with the commercial launch of the Inspire® Upper Airway Stimulation (UAS) therapy in the United States.
Last month, the FDA approved Inspire therapy, a first of its kind fully implanted device for use in a subset of patients with moderate to severe Obstructive Sleep Apnea (OSA) who are unable to use Continuous Positive Airway Pressure (CPAP) devices. Inspire therapy uses mild stimulation of the hypoglossal nerve to maintain an open airway during sleep.
The financing was led by OrbiMed in New York. Other new investors in this round are the Johnson & Johnson Development Corporation and Aperture Venture Partners. Existing investors of Inspire Medical Systems also participated in the round, including Kleiner Perkins Caufield & Byers, US Venture Partners, Synergy Life Science Partners, Medtronic, GDN Holdings and TGap Ventures. OrbiMed Private Equity Partner, Chau Q. Khuong, will join the Inspire Medical Systems' Board of Directors.
"We are pleased to have the support and confidence of this esteemed group of investors," said Tim Herbert, Inspire Medical Systems president and CEO. "This round of funding will enable Inspire Medical Systems to invest in the people and programs necessary to make this much--needed treatment available to patients and physicians."
"Inspire therapy fills an important and significant gap in the OSA treatment continuum," said Chau Q. Khuong, OrbiMed private equity partner. "We believe that both physicians and patients will have great interest in this innovative new therapy."
As part of the growth strategy of the company, Inspire also today announced that Richard Buchholz has been appointed as the chief financial officer (CFO). Mr. Buchholz is a veteran medical device CFO most recently serving as CFO of superDimension, which was acquired in May 2012. He brings a broad experience base in both privately-held and public companies. Prior to joining superDimension, Mr. Buchholz served as CFO of Vascular Solutions. He started his career at Ernst & Young. Mr. Buchholz is a licensed certified public accountant and was named the 2012 CFO of the Year by the Minneapolis/St. Paul Business Journal.
More than 18 million Americans have sleep apnea. Depending on the degree of severity, OSA can be a potentially life-threatening condition. Recent research shows that a person with poorly managed sleep apnea is at increased risk for heart attack, stroke, weight gain, high blood pressure and heart failure.
Current treatments for OSA include weight loss, CPAP, oral appliances and anatomy altering surgeries. While these treatments are often successful, studies show that roughly half of all patients that start CPAP therapy, the current standard of care, eventually become non-compliant. Inspire therapy offers a proven treatment option for OSA patients who have not found relief from traditional treatment options. Inspire therapy is commercially available to patients at several centers in the United States, and additional U.S. clinical centers will have the therapy available in the second half of 2014.