Hylomorph plans CHF 6.2m Series B round; receptive to trade sale as of 2023 – CEO

07 June 2021 - 05:13 am UTC

by Ketaki Gokhale in Paris

Hylomorph, a Swiss medtech developing biocompatible materials to minimise post-surgical complications in medical implants, plans to raise a CHF 6.2m (EUR 5.7m) Series B round, CEO Simone Bottan told Mergermarket.

 

The company is aiming to close the funding round by the end of September, he said. Approximately half the funds will be provided by its current investors. Hylomorph is seeking additional investors to join the round, whose proceeds will be used to file for regulatory approvals for a new product, and to secure regulatory approval for its existing product and prepare for commercialisation.

 

It has not appointed a financial advisor for the funding round, Bottan said.

 

The company has a pre-money valuation of CHF 13m, he said.

 

To date, the company has raised CHF 9.4m in funds, including equity and grants, Bottan said. It raised a CHF 3.2m Series A round in 2018, from investors including Switzerland’s Verve VenturesFongit Seed Invest and Zürcher Kantonalbank, according to a press release.

 

Hylomorph’s core technology, which optimizes the interface between implantable medical devices and biological tissues, was invented at ETH Zurich’s Lab of Thermodynamics.

 

Its product, Hylomate, is a pouch made of biosynthesized cellulose for implantable medical devices. The surface micro-engineered biosynthesized cellulose disrupts the process of fibrotic tissue growth that can happen when foreign objects are implanted in the body, according to company information. The material, a hydrogel that is more than 95% water, is also very durable, Bottan said. The product has the potential to reduce post-operation complications, thereby reducing hospital costs and improving patient outcomes, Bottan said.

 

The company is focusing on securing regulatory approvals for its product in two indications: for cardiac rhythm management devices such as pacemakers and defibrillators, and for neuro-stimulation devices.

 

Hylomorph is aiming for US FDA approval for its first product by the end of this year or early 2022, Bottan said. It is aiming to secure a CE Mark in Europe by the end of 2022 or early 2023, he added. The company needs to generate pre-market clinical data in Europe due to new medical device regulations, he explained.

 

The company has recruited 23 patients for its trial at three sites in Germany, and is working on recruiting another 23 patients, he said. The trial is supported by the German team of an undisclosed multinational contract research organization (CRO), he said. He declined to disclose the company’s cash burn rate.

 

Hylomorph’s patented CellSense Platform technology can be applied to other indications outside electrical stimulation devices, including in breast reconstruction and plastic surgery, Bottan said. Comparable companies with enveloping technology are TYRX, which was acquired by Medtronic [NYSE:MDT] in 2014 for USD 160m plus earn out and milestone payments, and Aziyo Biologics [NASDAQ:AZYO], which went public last year raising USD 43m, he said. Aziyo now has a market capitalization of USD 117m.

 

The company is receptive to discussions for a potential trade sale of its platform, or its products for specific indications, Bottan said. The cardiac rhythm management market is a particularly large one, with a number of significant players, including Medtronic, Abbott Laboratories [NYSE:ABT], Boston Scientific [NYSE: BSX], Biotronik and MicroPort Scientific [HKG:853], he said.

 

The earliest it could consider a trade sale would be in 2023, by which time it will have secured FDA approvals and CE Marks for its existing product and the next product in its pipeline, he said.