Non-drug depression treatment gets a boost
Neuronetics, based in the Malvern area, received $15 million in venture funding to help grow the use of NeuroStar Advanced Therapy
EAST WHITELAND » A Malvern area company that provides a non-drug treatment for depression has received $15 million in funding that will help it continue to grow.
Neuronetics Inc. said a new investor, Ascension Ventures of Saint Louis, Mo., led the offering. The $15 million will be used to expand clinical adoption of NeuroStar Advanced Therapy, Neuronetics’ transcranial magnetic stimulation, or TMS, treatment.
“We are pleased to welcome Ascension Ventures as a new investor and are proud of the support we continue to receive from the venture capital firms that currently invest in NeuroStar,” said Chris Thatcher, president and CEO of Neuronetics. “Investors continue to recognize the transformative work we are doing with NeuroStar Advanced Therapy in helping patients with Major Depressive Disorder, and see the broad potential in expanding access to this important therapy to the more than 4 million treatment-resistant adults living with depression who aren’t currently benefiting from their current antidepressant treatment plans.”
The Series G funding comes at a time when the company is making strides in improving access to the treatment. The company bills NeuroStar as the only FDA-cleared TMS treatment that can be delivered in under 19 minutes. It has delivered 1.4 million treatments to more than 50,000 patients.
Thatcher said the company will use the money for several purposes, including seeking clearance to use NeuroStar
on patients with bipolar and post-traumatic stress disorder, or PTSD; to do FDA trials on adolescents from 12 to 21; and to expand in Japan, which has acknowledged problems with depression and suicide in its population.
“We feel there’s a large unmet need in Japan,” Thatcher said. “They have the highest suicide rate of all developed countries.”
Similarly, there’s a potentially strong market in the U.S. for people under 22, the age patients must now at least be to receive the treatment, Thatcher said.
“In five years it’s projected suicide will be the leading cause of death” in American teenagers, Thatcher noted.
NeuroStar Advanced Therapy was cleared by the FDA in October 2008. It stimulates nerve cells in the area of the brain that has been linked to depression by delivering highly focused magnetic field
pulses. It typically is administered in doctors’ offices and is currently approved for patients who have tried at least one medicine with unsatisfactory results. It is approved now by Medicare and by 95 percent of private insurers, Thatcher said.
There are some 17 million Americans suffering from major depressive disorder. According to the company, around 4 million people in the United States being treated do not benefit from antidepressant medication.
In a clinical trial, 62 percent of patients treated with NeuroStar Advanced Therapy experienced significant improvement in their depressive symptoms, the company reported.
With the latest $15 million investment, Neuronetics has raised $150 million since its founding in 2003. The company with 130 employees is exploring its capital options, including going public and being acquired, Thatcher said.
The company chose the Malvern area to locate because it was the best fit for
the company founders.
“From there, there’s a good talent base in the medical device industry,” Thatcher said.
In addition to Ascension Ventures, Neuronetics works with venture capital firms in the life sciences industry, including Accuitive Medical Ventures, GE Ventures, Interwest Partners, Industry Ventures, Investor Growth Capital, KBL Healthcare Ventures, New Leaf Venture Partners, Onset Ventures, Pfizer, Polaris Venture Partners and Three Arch Partners. All of those firms participated in the Series G financing.
“We are confident Neuronetics will play an important role in how clinicians treat (major depressive disorder) in the future,” said Rubal Bedi, investment director at Ascension Ventures.