🔒Hamden medtech startup to double workforce after $27M capital raise

When Mike Theran was looking for funding to help commercialize a device his startup developed that increases blood flow for advanced heart failure patients, he was hoping to raise $12 million but was expecting to get closer to half that.

Then in December he met a group of Chinese investors at the virtual MedInvest Cardiovascular & Neurovascular Conference who were desperate to find a technology to help treat heart failure, a costly and deadly disease across the globe.

They bought into Theran’s technology. So much so that Hong Kong-based China Grand Pharmaceutical and Healthcare Holdings Limited (Grand Pharma) invested $27 million in his Hamden-based company, CoRISMA MCS Systems Inc.

The early-stage medical device startup will use the funds to take the heart failure device through development and preclinical trials. Grand Pharma will hold a 22% equity interest in the company and will gain distribution rights to the Greater China market.

Theran says the deal is a game-changer for CoRISMA that will help jump-start growth.

“It’s difficult to raise money for a highly complex medical device, so for us to find a strategic partner that wants to distribute our product in a major market that’s difficult to access and fund the development, honestly was a major deal for us,” he said. “Typically at this stage, companies are raising $8 million or so. I like to call it an elite deal. Their integrity was flawless and after 90 days of complex negotiations they never once backed away from a verbal commitment.”

Hitting home

The device is designed to increase the amount of blood that is pumped from the heart. Implantation doesn’t require surgery — the pump is delivered to the heart via catheter through a blood vessel in the groin area.

The device, also called CoRISMA, features wirelessly powered mechanical circulation support, which the company says is cheaper and less invasive than current late-stage heart failure treatments.

The investment will advance the product through development and preclinical trials, including animal testing. It will eventually need Food and Drug Administration approval; if all goes well, commercial sales are about five years out.

Theran said he started the company for personal reasons. In his 20s, he was working as a head of engineering for a firearms business.

“It was a great career path, but then both of my parents had heart attacks. I was in my late twenties and I'm looking in the mirror. I'm like, what the hell?” he explained.

Intrigued and knowing he was far from alone having family members with heart disease, he refocused his career and became an entrepreneur in residence at Yale, working with researchers on cardiology-related technologies. In Aug. 2018, he teamed with Pramod Bonde, a cardiac surgeon who was working in heart failure technology and invented the CoRISMA device.

“He was approaching the problem the right way and I decided to partner with him, take license of the technology and start this company,” Theran said.

Heart disease and stroke account for nearly one-third of all deaths, according to the American Heart Association, making it one of the most expensive and deadly diseases in the world.

“Heart failure is the number one cause of hospitalizations in the U.S. and globally,” he said. “So we only have so many dollars for health care, and heart failure gobbles up a lot of these dollars and the people with heart failure and the families of these people are suffering tremendously.”

Theran started the company in 2018 with funding from local high net worth individuals, doctors, angel investors and Connecticut Innovations, the state’s quasi-public venture arm. That helped raise an initial $1.1 million and the company also received a $555,000 grant from the National Institutes of Health.

Frank Zhou, Grand Pharma’s CEO, said his company was eager to jointly develop the technology with CoRISMA, which he said addresses “a major unmet need.”

The latest funding round gives Grand Pharma rights to market the device in Greater China as well as Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam.

Grand Pharma is publicly traded on the Hong Kong stock exchange and focuses on neurovascular and cardiovascular precision interventional diagnosis and treatment.

CoRISMA currently has seven employees, which Theran plans to double over the next six months as development ramps up. He said at some point, he’ll need a U.S.-based partner.

The company works out of the two-year-old Borough 496 business incubator on Newhall Street in Hamden.

“One of my advisors said that CoRISMA is the most significant medical device he's seen. The potential impact for individuals, families and health economics generally is huge,” Theran said. “It’s also a very complex device and I do think there'll be a relatively early commercial partner. I think strategically to increase the odds of success, it's the right decision to engage an early partner.”

In the meantime, the company will continue to work with the economic development group Connecticut Community Outreach Revitalization Program (ConnCORP), Yale and Connecticut Innovations.

“These alliances are very important for building up the ecosystem here in southern Connecticut,” he said.