Heart-valve maker gets VC dollars

Heart-valve maker gets VC dollars

Byline: Valerie Thompson in Zurich

A group of Swiss, French and German investors are handing Sfr12 million ($9.5 million) to children’s heart valve-maker Symetis AG, a University of Zurich spinoff, in a first round of funding.

The deal, co-led by Aravis Venture, the operating name of Zurich-based Venture Associates AG, and Paris-based Truffle Venture, will support a 3-year-old startup that makes heart valves from a patient’s own tissue and cells that it hopes to have on the market by early 2007.

“For children with heart problems, this is a life-saving proposition,” said CEO Jacques Essinger, who joined the company along with the first round financing.

The technique enables an implanted valve to grow within a child rather than requiring repeated open-heart surgeries, which can occur up to three times before age 15 using existing technology based on mechanical heart valves.

Today there is a 50% death rate for such children, Essinger said.

Essinger, who was in charge of Swiss bone and marrow medical device firm IsoTis SA until August, said Aravis’ Jean-Philippe Tripet sought his help with due diligence on the deal. Essinger said he told Tripet: “I hope it’s not a tissue engineering firm. I am negatively biased against them. Almost every tissue engineering firm fails.”

The entrepreneur basis his strong opinion on his experience over the last eight years: IsoTis merged with Modex Therapeutics, a tissue engineering firm specialized in skin that he co-founded in 1996 and took public in 1999.

The firm is now growing after “escaping” from the tissue business, Essinger said.

“Surgeons want a piece of skin they can graft on a burn, something with derma, epiderm and vascularity,” but don’t typically get that from tissue engineers, he said.

But when Essinger met Symetis’ founders in Zurich, Simon Hoerstrup and Gregor Zund, and discovered they were cardiac surgeons with a successful record in creating heart valves in animals, Essinger changed his mind. He helped them form the business plan and recently took charge at the company.

About 3,000 to 3,500 children a year in the U.S. and Europe could benefit from the breakthrough once it gets to market, he said.

Tripet would not reveal Symetis’ valuation but did say investors now own a majority of it. He said other investors are Novartis Venture Fund, Biomedinvest AG, part of Zug, Switzerland-based HBM Bioventures AG, and Gaia Kapital-Beteiligungsgesellschaft GmbH of Cologne, Germany.

Symetis raised a seed round of Sfr4 million from Gaia in late 2001.

It will use the new capital to build up the tissue manufacturing process, much of which is now done in collaboration with the University of Zurich bioengineering laboratories, and to hire experienced researchers for clinical trials of the valves in humans.

Truffle Venture director general Philippe Pouletty, who founded three biotechnology firms, taking two of them public before turning his hand to venture capital, will also join the firm’s board.

Zurich-based law firm Rohner Rechtsanwalte represented the investors.

COMPANY: Symetis AG

COMPANY: Aravis Venture

COMPANY: Venture Associates AG

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