Autoimmune disease treatment developer SetPoint Medical announced today that it raised $80 million in a preferred stock financing.
Valencia, California-based SetPoint Medical develops a novel platform for treating chronic, inflammation-mediated autoimmune diseases. Its initial focus centers around a potentially less immunosuppressive option for treating rheumatoid arthritis (RA).
New investors Norwest Venture Partners and Viking Global Investors co-led the preferred stock financing. New investor Gilmartin Capital also participated.
Returning investors New Enterprise Associates (NEA), Action Potential Venture Capital, Boston Scientific, Topspin Fund, Euclidean Capital, Morgenthaler Ventures, Richard King Mellon Foundation, ShangBay Capital, Ascendum Capital, Catalio Capital Management, Midas Capital, Citta Capital, SVE Capital, and an undisclosed strategic investor all participated.
“We are thrilled to secure an equity raise with a group of seasoned investors who possess deep industry knowledge and a passion for improving outcomes for patients with chronic medical conditions,” said Murthy V. Simhambhatla, president and CEO of SetPoint Medical. “We look forward to furthering our clinical and regulatory goals toward FDA approval of our novel approach in partnership with our investors.”
SetPoint Medical’s plans for the financing
The company said it intends to use proceeds to complete its ongoing RESET-RA trial. It also earmarked funds for the subsequent FDA submissions and early commercialization for the RA indication.
RESET-RA, a multicenter, double-blind, randomized, sham-controlled trial evaluates the RA treatment that uses vagus nerve stimulation. The company recently enrolled the first patient in the second stage of the study.
SetPoint’s system holds FDA breakthrough device designation for RA patients with incomplete response (or who are intolerant to) multiple biologic drugs. The system features a miniaturized stimulation device placed on the vagus nerve. It’s placed through a small incision on the left side of the neck in an outpatient procedure. Once placed, the device automatically delivers therapy on a preset schedule.
Other company news
As part of the financing, Dr. Zack Scott, general partner at Norwest, joined SetPoint’s board of directors.
Separate from the $80 million financing, SetPoint also secured a loan facility worth up to $65 million from Runway Growth Capital. The loan marks an expansion of an existing credit facility with Runway.
The company said it plans to use funds from the credit facility for the same purposes as the financing.
“This non-dilutive debt financing provides additional support and flexibility as we advance our mission and progress toward completing the RESET-RA study,” Simhambhatla said.