Harpoon Medical Inc.

323 West Camden Street

Suite 675

Baltimore, MD 21201

Phone: (410) 346-5687

Web Site: www.harpoonmedical.com

Contact: Bill Niland, CEO

Industry Segment: Interventional Cardiology

Business: Minimally invasive mitral valve repair

Founded: July 2013

Founders: Bill Niland; James Gammie, MD (University of Maryland, Baltimore)

Employees: 10

Financing To Date: $4.5 million

Investors: Epidarex Capital; Maryland Venture Fund; The Abell Foundation

Board Of Directors: James Cox, MD (formerly Washington University); James Gammie; Kyp Sirinkais (Epidarex Capital); Bill Niland

Scientific Advisory Board: James Gammie; John Brown, MD (Indiana University School of Medicine, Indianapolis); William Cohn, MD (Texas Heart Institute, Houston); James Cox; Michael D’Ambra, MD (Harvard University)

Never underestimate the loyalty of a son to his mother. When Bill Niland’s then 82-year-old mother was diagnosed with aortic stenosis in 2010, she was told by doctors that she needed aortic valve surgery. But Niland’s mother, who lived in Buffalo, NY, did not want to undergo open-heart surgery with cardiopulmonary bypass, which was the only option offered by area hospitals. Being a good son, Niland, who lived in Annapolis, MD, sought alternatives. His quest led him to James Gammie, a cardiac surgeon at the University of Maryland School of Medicine who had performed aortic valve bypass surgery on a beating heart. “Dr. Gammie thought my mother was a good candidate for the surgery,” Niland recalls. “My mother had an extremely successful procedure and today is very active at age 87.”

As a result of their interaction, Niland and Gammie became friends. Then, in early 2013, Gammie called Niland about his new degenerative mitral valve repair intervention: an expanded polytetrafluorethylene (ePTFE) anchor that replaces the non-functioning natural chordae tendineae. The anchor is inserted via a small incision between the ribs and into the leaflet to eliminate mitral valve regurgitation or blood flowing backward into the heart. In July 2013, the two men formed Harpoon Medical Inc. to commercialize the product.

Currently, around 40,000 patients in the US each year undergo open-heart surgery for mitral valve regurgitation. However, every year, roughly 250,000 Americans are diagnosed with significant mitral valve regurgitation who are not operated on because of the invasive nature of present-day surgery. The company estimates a potential yearly US market opportunity of $2 billion for its device, representing at least 200,000 patients, including between $400 million and $800 million for all patients currently being treated by open-heart surgery.

Gammie was inspired to develop the device to increase the number of candidates for valve repair, who are often excluded from traditional open-heart surgery because of co-morbidities like diabetes and kidney failure, or they are older or frail. The surgeon also sought to shorten the procedure time, so he could treat more patients in the same period of time as conventional surgery. The Harpoon procedure is anticipated to take 60 to 90 minutes, as opposed to between three and five hours with the open-heart method.

Gammie was able to repair the chordae tendineae on a beating heart, without the need for cardiac arrest or cardiopulmonary bypass, by creating a very small ePTFE anchor, about 0.5 cm, that could be deployed to the mitral valve via a 9 French (9F) delivery shaft; the anchor is placed on the diseased mitral valve through the leaflet under echocardiographic (echo) guidance, and then the length of the anchor is secured to tether the chordae to the beating-and-moving mitral valve.

Harpoon Medical is Niland’s fourth medical device start-up. In 1999, he founded Vapotherm Inc. (high-flow nasal cannula therapy for respiratory ailments) and served as chief business officer until 2013. Niland also started National Sleep Technologies Inc. (testing and treating sleep apnea) in 1994 and acted as president and CEO until the company was sold in 1999 to Vital Signs Inc.

Harpoon has two issued and four pending patents. It pays royalties to the University of Maryland, Baltimore, from which it exclusively licensed the technology. [See Deal]

To use the anchoring device, the cardiac surgeon first performs a small thoracotomy (a 1- to 2-inch incision) under the left breast of the patient. The device is inserted into the heart via an introducer valve, then using echo guidance the device is navigated into place on the diseased mitral valve leaflet. Once the valve is secure, multiple Harpoon devices can enter and exit the ventricle. The main purpose of the valve, though, is to provide hemostasis, so blood does not rush out when the heart pumps. “This allows us to have minimal blood loss during surgery,” Niland says.

Under echo guidance performed by an echocardiologist, both the surgeon and echocardiologist direct the anchor through the valve and deploy the device into the valve leaflet. “Every time a normal patient’s heart beats, the anterior and posterior leaflet come together to prevent blood from reversing direction,” Niland explains. “But with mitral valve regurgitation, the chordae tendineae that allow the valves to close either break or elongate.” Harpoon’s anchor repairs the misaligned leaflet by permanently implanting new chordae tendineae, via a bulky knot, and the neochords are tensioned down under Doppler imaging to ensure proper functioning.

The procedure is performed under general anesthesia and patients will likely remain in the hospital one to three days postoperatively, compared with five to 10 days for standard of care. Niland says the learning curve for surgeons should be minimal.

An early European feasibility study of the Harpoon device involving 20 patients began in early February. To date, three patients have been implanted with the anchor, “all with excellent outcomes,” Niland reports. “In practical terms, mitral regurgitation has been eliminated and there have been no adverse events.” By the end of the year, all 20 patients are scheduled to have undergone the procedure.

Harpoon says its closest competitor is NeoChord Inc. (NeoChord DS1000), which also offers minimally invasive treatment to repair degenerative mitral valve disease on a beating heart with new chordae tendineae. “It is a very similar procedure, but we think our device is better because it is smaller and will be easier for the surgeon to implant,” Niland notes. A second rival is Abbott Laboratories Inc. (MitraClip), which uses a metal clip to join the two leaflets on a beating heart. “However, doing this edge-to-edge repair is not standard,” Niland says. “We replicate what is being done in the operating room today with chordae repair. MitraClip does not duplicate the natural chordae tendineae and how they bring the leaflets together.”

Niland points out that the cardiac surgery field prefers mitral valve repair over valve replacement from enterprises such as Tendyne Holdings Inc. and CardiAQ Valve Technologies Inc. because the procedure is less invasive, and the patient retains his native valve and avoids lifelong anticoagulant therapy.

CE mark for the Harpoon anchor is expected at the end of 2016, followed by PMA in 2018. It could begin selling in Europe in early 2017, most likely through a network of distributors, and the product should be reimbursable. US sales are slated for 2018 via a direct sales force, and the company expects it will be reimbursable.

Harpoon has raised $4.5 million raised to date from a Series A round that closed last September, led by Epidarex Capital. [See Deal] A Series B in the $10 million to $12 million range should close by the end of the year, with Epidarex Capital expected to participate, as well as two other previous investors, The Maryland Venture Fund and The Abell Foundation. These backers and potentially new venture funds are being sought to underwrite a large European clinical trial of 80 patients scheduled to begin in the fourth quarter of this year. The two most likely exit strategies for Harpoon are acquisition or going public, as early as 2017 for both scenarios.

Harpoon’s platform may also be applicable for treating functional mitral valve regurgitation, a market twice the size twice of the degenerative valve repair market.

Harpoon Medical: Beating-Heart Mitral Valve Repair

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