A Houston company enrolling patients for its heart pump is the latest medical device company to secure significant funding despite a tough environment for medical technology.
Procyrion closed a $57.7 million Series E round, its first new funding round since a $30 million Series D in 2019. Fannin Partners LLC, the owners and operators of the Fannin Innovation Studio, led the round with participation from undisclosed new family investors as well as returning investors such as Palo Alto, California-based Bluebird Ventures.
The Series E financing also includes $10 million that was used as a bridge while the company was completing its first clinical study. According to Procyrion's Crunchbase profile, the company had raised $64.7 million prior to the Series E round's announcement.
Dr. Eric Fain, who was hired in 2018 as Procyrion’s president and CEO, said the onset of the Covid-19 pandemic threw off Procyrion’s timeline after the Series D closed. While the company was able to get its initial device design ready, its clinical testing had to be pushed back because hospitals did not have enough space during the early years of the pandemic.
The new funding is timed to coincide with Procyrion’s second clinical study, known as the Drain-HF pivotal study, of its product Aortix, Fain said. Aortix is a mechanical device that supports patients undergoing acute decompensated heart failure, or ADHF, who do not respond to standard medical therapy. About 25% of ADHF patients cannot be treated by standard therapies and have few alternatives, Fain said.
"The study will enroll in two separate arms, which is an outcome of our pilot study," Fain told the Houston Business Journal in an interview. "We will enroll patients with complicated heart failures with the goal of getting them decongested and back home so they can resume a normal life. The other arm consists of patients that have acute, untreatable heart failure, and the goal will be to ease their suffering and see what percentage of patients are able to successfully receive a heart transplant."
Procyrion expects to submit a premarket approval application to the Food and Drug Administration by the end of 2025 after completing its study. The PMA will also include details of Aortix’s commercialization and its manufacturability, or the ease of production of its components. Currently, Procyrion partners with other companies to manufacture Aortix, said Jace Heuring, the company’s Houston-based COO and chief scientific officer.
"At the scale we're operating at and with the things we need to prepare for commercialization, like injection molding some of the parts, that is something super capital intensive that isn't available in Houston at the moment," Heuring said.
The environment for medical technology funding has become more difficult for companies to navigate as turmoil in the venture capital ecosystem and wider economic pressures have led firms to invest more cautiously. By the third quarter of 2023, Pitchbook found that medical device deal count in Houston slipped to 15 from a decade-high of 35 in 2021, and deal value dropped to $50 million from $260 million over that two-year period.
Heuring said that Procyrion and Aortix were attracting attention from some investors that ended up not being able to invest during the Series E. However, Fain and Heuring said Procyrion has still been able to hit most of the anticipated milestones.
“We knew coming out of [Covid-19] that the investment environment was tough for medical technology in particular,” Fain said. "We wanted to have strong data from our clinical trial to show investors, and we needed to work with the [Food and Drug Administration] on our pivotal trial design so we could show investors the risks and the timeline."
Procyrion is not the only Houston-based medical device company that has attracted investor attention in recent months. In January, Motif Neurotech, a startup that spun out of a Rice University accelerator, closed an $18.7 million Series A funding round. Meanwhile in December, Houston-based EndoQuest Robotics closed a $42 million Series C-1 round, which had the third-highest value of all Houston deals Pitchbook recorded in Q4.
Fain said Procyrion employs fewer than 30 people and may add some additional staff during the Drain-HF study. The company’s offices are located at 3900 Essex Lane, a building which is also home to the Fannin Innovation Studio.
