Irish medtech group Neuromod Devices has raised €30 million to fund its expansion into the US market in one of the biggest fundraisings by an Irish company this year.
Neuromod’s Lenire device has been approved by the Food and Drug Administration (FDA), the US regulator, for the treatment of severe tinnitus in the US market. Lenire is the first bimodal neuromodulation device on the market, using both sound and electrical stimulus of the tongue to reduce the symptoms of the condition.
Tinnitus is characterised as a persistent ringing in the ears and affects one in eight adults. It is a particular problem among US army veterans. Neuromod chief executive Dr Ross O’Neill said its first target in the US would be to secure as many contracts as possible with VA (department of veteran affairs) clinics across the country.
“The US is a huge market, 40 per cent of the global hearing-aid market, and 50 million Americans have tinnitus,” said Dr O’Neill, the company’s founder, noting that the US department of defence’s department of veteran affairs is the largest purchaser of hearing aids globally, buying about 800,000 a year to service 1.5 million veterans with hearing loss.
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“But there is almost twice that with tinnitus – 2.7 million veterans – and they have nothing for them,” Dr O’Neill said. He added that, at present, compensation to this group is costing the US about $4.9 billion (€4.46 billion) a year.
“They will have to step things up on the treatment side so we think it could be very serendipitous for us getting approval right at this time when the number of tinnitus patients is growing very quickly – around 12 per cent a year. They are going to have to do something for these patients.,” he said.
The latest funding – which more than doubles the money the NUI Maynooth spin-out has raised since it was founded in 2010 – is split evenly between venture debt funding from the European Investment Bank and new equity investment. The equity investment was led by a new shareholder, Italian life sciences specialist Panakès, but also includes the company’s existing shareholders.
They are led by Irish life science venture capital group Fountain Healthcare Partners, which is the largest single investor in the business. Others include early stage investor Moffett Investment Holdings, the investment vehicle of Combilift cofounder Robert Moffett, Medical Device Resources and Enteprise Ireland.
“We have continued to have the complete support of all of our long-term investors and now Panakès has joined that group as well,” said Dr O’Neill.
“This is our biggest fundraising deal by far,” he said, “and getting the European Investment Bank on board is fantastic. It is a great endorsement for the company.”
Neuromod, which announced that FDA approval at a joint defence and veteran audiology conference in the US has already received its first US order and the first shipment from its Letterkenny-based manufacturing partner, Philips-Medisize, was en route this week.
Aside from chasing VA contracts, the Irish company has signed up 20 partners across the major metropolitan areas in the US initially to grow its private sector business with a view to scaling up to about 200 once it gets established.
The device will cost customers about $3,000 with the tongue tips replaced by customers as a consumable roughly every three months.
“It is what we have been building towards so it is very exciting,” Dr O’Neill said.
The funding will also help further expansion in Europe with the company planning to enter new markets in Italy, the Netherlands, Portugal and Sweden, as well as funding next-generation product development. Neuromod already operates in Ireland, Britain, Germany, Austria, Belgium and Switzerland.
